Lord Chidgey: My Lords, I beg to move that this Bill be now read a second time.
	Perhaps I may draw noble Lords' attention to the summary of the statement issued this week by the OECD Working Group on Bribery on its phase 2 report on the United Kingdom. Notwithstanding its current concerns about the dropping of the BAEAl Yamamah investigation, it outlined continuing shortcomings in the United Kingdom's anti-corruption legislation. It urged the UK to remedy those shortcomings as quickly as possible and it has decided to conduct a further examination of the UK's unsatisfactory efforts to fight bribery.
	The OECD's phase 1 report found the UK's anti-bribery legislation wanting; it still found it wanting in the 2005 phase 2 report; and the legislation is found wanting again in March 2007. Recommendations that the UK should enact modern foreign bribery legislation at the earliest possible date remain unimplemented. So we are to be examined again, a sort of "phase 2B" report. That is a pretty poor record for a country that is supposed to be leading the way in promoting ethical foreign policy and business.
	In introducing this Second Reading debate, I want first to place on record my gratitude for the wide-ranging support and guidance that I have received from Members of both Houses, from all parties and from Transparency International (UK), which has enabled me to bring the Bill before your Lordships' House. I thank the many noble Lords for their attendance here today—I trust, in support of the Bill, or is it to see whether there is blood sport in the offing?
	The Bill is unusual in that it began life in another place as a 10-minute rule Bill. The initiative sprang from the work of the Africa All-Party Parliamentary Group, of which I am vice-chairman. The group, under the chairmanship of Hugh Bayley MP, produced and published its report The Other Side of the Coin: the UK and Corruption in Africa, which urged the Government to enforce existing laws against bribery and corruption. It called for a new anti-corruption Bill to be brought before Parliament before the end of 2006 to address concerns raised by the joint parliamentary committee and the OECD phase 2 review about the 2003 draft Bill.
	In late May 2006, Hugh Bayley MP, backed by other senior Members across the parties, including the right honourable John Denham MP, the right honourable Malcolm Bruce MP and John Bercow MP, introduced a draft Corruption Bill under the 10-minute rule in the other place. The Bill, drafted with the support of the Joseph Rowntree Charitable Trust and TI(UK) was well received, both as a serious piece of legislative drafting and as a contribution to the wider debate on tackling corruption.
	In June 2006, Downing Street endorsed the Africa All-Party Parliamentary Group's conclusions that the Government should take a lead in tackling international corruption and agreed to implement most of the group's recommendations. The draft Corruption Bill, having been read under the 10-minute rule, fell away and ceased to feature in the parliamentary programme. To rectify this and to avoid losing important draft legislation, I have brought it forward, updated and amended as a Private Member's Bill, to your Lordships' House for further consideration.
	Anyone who has been involved with the developing world cannot have failed to see the devastating effect of international and domestic corruption on the lives of poor people in poor countries. Poverty-line incomes are eroded by corrupt demands for payment for basic services—services that the state intended should be provided free of charge. When officials and ministers siphon off funds meant for the development of health, education or road building, everyone suffers.
	The Prime Minister's Commission for Africa found that,
	"systematic corruption can add as much as 25 per cent to the costs of government procurement".
	It also found that,
	"of the US$4 trillion spent worldwide on government public contracts each year, some $400 billion is lost to bribery".
	I repeat, $400 billion per year—more than the total annual income of the population of Africa.
	But the impact of corruption goes far beyond the headline figures. It leads to loss of investment, discourages private sector development and slows economic growth. It also, of course, raises the need for effective scrutiny and regulation of international and commercial centres to tackle corruption's supply side. The international business community has itself taken the initiative, where it can, in addressing corruption at home or abroad.
	For example, the British Consultants and Construction Bureau, the Institution of Civil Engineers, of which I have the honour to be a fellow, the Institute of Mechanical Engineers, with which I first graduated, the Institution of Structural Engineers and Transparency International are working together as part of the Anti-Corruption Forum to promote industry-led action to eliminate corruption. Established in October 2004, the forum's members represent over 1,000 companies with interests in the infrastructure, construction and engineering sectors. Through its developing countries working group, the forum is working to help to create anti-corruption forums in developing countries. It is co-operating in exchanging ideas and information and developing best practice. The forum's multilateral bank working group is examining how improved financial procedures can help to reduce corruption and how greater assistance can be provided to contractors and consulting engineers faced with extortion demands or having difficulty in receiving permits, certificates and payments.
	The United Kingdom-based international commercial banks are addressing areas where they see threats from corruption, the risk of their employees being involved and the risks of the proceeds of corruption passing through their systems. As would be expected, there is automatic zero tolerance towards employees or businesses with involvement in any form of corrupt practice, as is consistent with UK law and corporate values. However, there is also an acceptance of the challenges of making sure, across a wide variety of cultures, that employees feel sufficiently empowered to speak up if they see something that they are concerned about.
	Addressing the risks of the proceeds of corruption passing through the systems of the banking world can be even more challenging. Although robust anti-money-laundering controls are in place, together with automated screening of international payments, it can be like looking for a needle in a haystack. International banks are for ever urging law enforcement and intelligence agencies to share suspect names with them before they are added to the public sanctions lists, by which time the birds may well have flown.
	That brings me to the concept of preventing corruption in the defence sector and the recognition of the impact of legislation in this sector, although in the UK it could be argued that we still await the arrival of legislation that would have a significant impact. During the Cold War, "corruption" and "defence sector" were almost synonyms. Many take the view that there was little or no attempt to secure integrity in the sector, as much by exporting Governments as by defence companies and state purchasing agencies. Real and significant change did not begin to occur until after the fall of the Berlin Wall. But past practice left a long legacy, with the result that many major investigations are still being progressed around the world into deals done in the 1980s and 1990s.
	The tipping point for European companies was the passage of the OECD convention in 1997. This has seen many companies develop codes of conduct and anti-corruption programmes. The second major impact has been anti-corruption legislation in the USA. Passed as long ago as 1977, it has long had an impact on constraining corrupt behaviour by US firms. More recently, it is being used, with increasing frequency, to pursue foreign firms.
	In this context, E Anthony Wayne, when he was US Assistant Secretary of State, reportedly commented that,
	"though it had signed up to international anti-bribery agreements, the UK was slow to take action to correct perceived deficiencies".
	He complained of,
	"the consistent pattern of alleged behaviour, over time",
	and added that,
	"press accounts reinforce material from more sensitive sources".
	With the US being the UK's—and thus BAE Systems'—most important defence export market, the perceived intransigence by UK authorities, and the company, over the Al Yamamah Saudi saga is damaging our defence industry overall. It is a compelling reason why the new legislation is so necessary, and why further delay is so unacceptable.
	In spite of a lack of legislative guidance and support, the defence industry has shown itself to be open to collaboration in improving anti-corruption standards. Through its own efforts, transnational agreements have been entered into to share information on business conduct codes. A common code of anti-corruption practice to which defence companies will adhere has been successfully established across Europe.
	In the international development export arena, views are also beginning to change. The chief executive of the British Consultants and Construction Bureau was quoted in New Civil Engineer magazine of 7 September 2006 as saying that,
	"the attitude of 'Oh gosh, there is nothing we can do about it, it's just part of their culture', is nonsense. It is learned behaviour. It is regrettable, but it is down to poor governance, it is not a natural human state".
	What is clear is that the UK's international business, industry and banking community have, over the past decade or so, taken corruption seriously, and worked together to tackle its impact. British companies can no longer claim to be at a disadvantage compared to foreign competitors by rejecting corrupt practices. All OECD countries and all UN states are expected to legislate against corruption to similar standards. Demonstrably, when it comes to legislation, the UK has fallen behind. It is a major embarrassment to the UK, to the Government and to ourselves that the OECD review of compliance with its convention noted that, while the USA and France, among others, had prosecuted companies in their countries for transnational bribery, the UK to date—March 2007—had not.
	There is little dispute that the UK's anti-corruption legislation is out of date, obscure and inadequately enforced. It rests on a confusing mix of common law and statute, principally the Prevention of Corruption Acts 1889, 1906 and 1916—before the first aeroplane took flight, I think.
	Successive Home Secretaries have promised new anti-corruption legislation but nothing emerged until after the Law Commission released a consultation paper in January 1997 and published proposals in March 1998. It was not until 2003 that the draft legislation proposed by the commission was adapted in a draft Bill and referred for scrutiny to an all-party joint parliamentary committee. The committee was very critical of the fundamental approach to defining bribery, believing that no one would understand it—not the police, not prosecutors, not jurors, not the public, and, in particular, not businesses or the public sector in the UK and overseas. In due course, the Government have accepted the importance of trying to find an agreed way forward and, in December 2005, commenced a consultation process. That was some eight years after the Law Commission first published its proposals.
	This Corruption Bill has been developed as an adjunct response to the consultation process, with the aim of reforming the law of bribery in a way that is readily understood by all parties. It would enable the UK to become fully compliant with its international obligations. It has been developed with a genuine desire to introduce flagship legislation reflecting: the growing importance of the City of London as a conduit for world trade and investment; the UK's role in international bodies engaged in combating corruption; the UK's leading role in combating organised crime and international terrorism; and the importance of maintaining high standards of business integrity to maintain confidence in the UK's equities and securities markets. The Bill has been developed to reflect the UK's role in supporting developing countries through the provision of international development aid, the promotion of transparent global markets, the support for democratic government and the equitable use of world resources.
	The content and scope of the Corruption Bill follow the Government's 2003 Bill but it adopts a very different approach to specifying the principal offences. The Bill focuses on the real mischief—improper conduct that is intended to result from a bribe—in Clause 1. There are separate offences to cover bribery within normal agency relationships in Clause 2. There is a further offence of bribery in the context of foreign officials, which places beyond doubt the UK's compliance with both the OECD and UN conventions, in Clause 3. Clause 4 covers the offence of foreign bid-rigging, which is identified by the joint parliamentary committee and applies only in the UK, but was not recognised in the Government's Bill. A further new offence to protect sporting events from match or performance result-fixing is covered in Clause 5.
	There follows a series of clauses dealing with reporting corruption in the public sector, and then Clauses 11 and 12 deal with the supervision of foreign subsidiaries. I am aware that there are concerns that making UK companies liable for the acts of foreign subsidiaries would have significant implications for company law, but that seriously misunderstands the clauses in the Bill. They do not make companies liable for the acts of foreign subsidiaries; they require a UK company to,
	"take all such steps as are reasonably open to it to secure that",
	such subsidiaries do not bribe. Any prudent UK company will be taking these steps in its own interests in protection of its reputation and will not be troubled by such provisions.
	The definition of bribery has been at the heart of the Government's law reform throughout. Transparency International took the view that, if the law was to be reformed for the first time for 100 years, it was sensible to give full consideration to legislating over a wide range of matters constituting corruption, as it happens in the real world. This is partly to respond more effectively to our international obligations by treaty but it is also a move to tackle matters of concern to business and international development. By way of illustration, this Bill includes additional matters such as: the specific provision for foreign bribery; foreign bid-rigging; corruption in sport; a duty to report instances of corruption; the responsibility of a UK company for a bribe by an overseas subsidiary; failure by a UK company to ensure that satisfactory anti-corruption measures are in place overseas in associated or joint venture companies; a clear empowerment of the serious fraud squad; and the removal of the special consent of the Attorney-General for the prosecution of corruption offences.
	Those working in anti-corruption internationally recognise the need to counter modern conditions with laws that are in tune with current behaviour and practice. The international conventions in the Council of Europe and the UN, for example, address a whole range of offences. There is no logic in imagining that a single statutory offence should apply equally well in all circumstances and in all places. In that regard, I urge the Government to reconsider their declared position of, "We do not believe we should do this", and to review urgently the Bill's additional matters.
	As the Home Office's response paper to the consultation process recognised, many experienced politicians of serious intent have contributed to the development and preparation of the Bill. As the Home Office also acknowledges,
	"TI have considerable authority",
	as a serious organisation with the combat of corruption as its sole focus. TI promotes the Bill to move the UK towards a comprehensive anti-corruption code. It has no interest in developing legislation but it wishes to promote that aim to this Parliament and this House.
	The Bill's proposals are the product of long and careful consideration. The resources required to assemble and present them in the accepted parliamentary legislative form could not have been found without the support of the Joseph Rowntree Charitable Trust.
	By committing to a Bill that not only defines bribery intelligibly, in a manner that business and agencies will readily understand, but also has key components of modern anti-corruption code, the Government would take a positive step towards countering the concerns that the UK is not serious about tackling corruption. That, sadly, is the perception in view of the extraordinary and continuing delay in modernising our laws, the adverse reports received from the OECD evaluations and, most recently, the perceived premature decision to discontinue the investigation into BAE Systems' dealings with Saudi Arabia. I commend the Bill to the House.
	Moved, That the Bill be now read a second time.—(Lord Chidgey.)

Lord Neill of Bladen: My Lords, I add to what the noble Lord, Lord Berkeley, said, in congratulating the noble Lord, Lord Chidgey, and Transparency International on their initiative. It is a matter for regret that it has been left to private initiative to move forward in this absolutely vital area. Anybody with any experience of international contracts and their performance around the world would have found, time and again, either direct bribes being reported or commission of a dubious character being demanded by intermediaries. I am afraid that it is a bad and corrupt world out there; it is getting better, but there is a long way to go.
	On Transparency International, I took over from the late lamented Lord Nolan to become the second chairman of the Committee on Standards in Public Life, almost exactly when the OECD convention appeared. We took an interest in it on that committee; I see that the noble Lord, Lord Goodhart, who was a member of the committee, is a later speaker in the debate. We hoped that it would be introduced in full in the UK within a short period. That has not come about.
	I deplore two facts already mentioned. First, the UK has been publicly and internationally criticised for its failure completely to incorporate all the provisions of the OECD convention. We were earlier reprimanded with Japan; Japan put its house in order, and I understand that we have continued not to do so. That is the first matter for regret and embarrassment. The second is the international criticism repeated again this week by the OECD working party in Paris following up on the UK's performance. It expressly criticised the abandonment of the bribery investigation concerning a defence contract linked with Saudi Arabia. I understand that that is the subject of legal proceedings, and it would not be appropriate to say more. On the record, however, we have public criticism of this country, which is how it is perceived internationally. Those two points are very worrying.
	I shall briefly make one or two points on the text of the Bill; it may be said that these are things to raise in Committee, but they are major points. The gist of the offence under Clause 1(1) is the payment of money or conferring of advantages to cause the exercise of a function to be made improperly. It raises the question of the payment of money to procure the proper exercise of a function. I first came across this in a country which I shall not name. I was there with my instructing solicitor on an urgent matter, and wehad to get a letter to a Minister in a government department. We turned up at the door of the ministry with our letter, and the doorman said, "I am sorry, but I am not going to deliver this letter to the Minister without the usual payment". Perhaps I should go to prison for this, but we had to bribe the doorman to present the letter to the Minister. That country wasso infiltrated by corruption that it would hardly have caused surprise to anybody else. I was simply amazed, and it made me start thinking about payments of money to procure proper performance.
	I am afraid that I have had a slight obsession with the OECD convention on "facilitation payments". I have always felt that it was deeply worrying. Paragraph 9 of the OECD official explanatory commentary on the convention will be familiar to all who have followed the issue:
	"Small 'facilitation' payments"—
	that rather reminds one of the conversation of the small baby and the lady of the house—
	"do not constitute payments made 'to obtain or retain business or other improper advantage' within the meaning of paragraph 1 and, accordingly, are also not an offence. Such payments, which, in some countries, are made to induce public officials to perform their functions, such as issuing licenses or permits, are generally illegal in the foreign country concerned. Other countries can and should address this corrosive phenomenon by such means as support for programmes of good governance. However, criminalisation by other countries does not seem a practical or effective complementary action".
	I have always rather deplored that paragraph, because it says that small facilitation payments—bribes—are okay. I have always thought it a pity that that accompanies the convention. I will not go on any more about that, but those bringing the Bill forward need to think about the use of "improperly", which appears also in Clause 1(2).
	Moving rapidly on with points that may deserve a little consideration, the noble Lord, Lord Berkeley, has spoken about Clause 4, "Foreign bid-rigging". The definition of bid rigging is a little naive, in that it leaves out quite a common form of corrupt agreement which has certainly happened to my knowledge in the past. A group of, say, six construction companies, important players, agree that they will put in bids of ridiculously high figures, leaving the way clear for the seventh who will get the job. Now, there may be somebody else, but there is a corrupt agreement between those seven. I do not think that that falls within the definitions of bid rigging in paragraphs (a), (b) or (c).
	I welcome Clause 5, dealing with corruption in sport. It is high time we had an absolutely clear criminal clause dealing with this worrying phenomenon. There have been many reported instances of events being deliberately thrown by goal keepers and other performers, rigging the results by not performing properly. Perhaps this is more of a tease than a point, but it must be sport; the definition of "sporting event" includes the word "sport". Would that include an international bridge contest, or the World Chess Championship? It is, of course, inconceivable that corruption could enter those events, but careful thought should be given to the inclusion of "sport" in the definition.
	Clause 8 is a very good duty clause, imposing a duty to report attempts at corruption. Clause 9 makes a failure to report a criminal offence. My problem is that, as I read Clause 8, one of those who should report is the person who has actually received an advantage. However, by doing that, he would have committed a criminal offence under Clause 1(2)(b) or Clause 2(2), and it is a cause for concern that that looks like a duty to self-incriminate. It needs a little thought. I have not taken it any further, but I am worried by the provision. It is very unusual because there is normally a privilege against self-incrimination.
	A small point is that Clause 11 is all about corporate entities. It would be helpful if it were expanded to include individual employees of companies.
	Finally, I hope the noble Baroness, Lady Scotland of Asthal, will deal with a point about Scotland. Clause 24 states that the Bill does not apply to Scotland. I would be interested to know the current position there and whether Scotland has provisions that we could model.
	I wish the Bill every success.

Lord Garden: My Lords, I congratulate my noble friend Lord Chidgey on introducing the Bill. It is extraordinary that it has become necessary to do so, but it is clear that it is because the Government have been using delaying tactics. I note that the Written Statement last week includes a new tactic—kicking this into touch in the Law Commission for another couple of years. The need is urgent, more so now in the light of the considerable damage done to this country's reputation as a result of the suspension of the Serious Fraud Office inquiry into corruption allegations involving the Al Yamamah project.
	The statement on 14 March by the OECD working group on bribery, to which noble Lords have referred, is a strong condemnation of the United Kingdom's record. One expert said to me this week:
	"In nearly 40 years of work involving international organisations, I cannot recall one being so critical of a major member. The Government will have to do a great deal better than sending this to the Law Commission for the next two years".
	The statement reminded the world in detail about how the United Kingdom has been dragging its feet. There was already growing concern among those who follow these matters that the UK appears to be more reluctant to prosecute than other OECD members.
	I shall focus on the security-related aspects of corruption, although I realise that the Bill rightly covers a potentially much wider field of economic activity. I remind your Lordships that I am a member of the strategy group that advises Transparency International UK on the prevention of corruption in the official arms trade. The two major areas that have long been recognised as particularly prone to corrupt practices in international contracts are the construction industry—the noble Lord, Lord Berkeley, spoke of his experience of that—and arms sales.
	The arms trade is a highly competitive field in which large sums of money are at stake. Decisions are taken by government officials and politicians in the country that is buying a particular military capability. The contractual costs are often very opaque, partially as part of negotiating strategies, but also to protect commercial opportunities elsewhere. Payments may be made by means other than cash, and the whole can be further complicated by the use of offset deals, which may be in unrelated fields. Each of these aspects provides opportunities for corruption. Corrupt benefits may take the form of post-deal arrangements to give advantage through the subsequent offset arrangement.
	When I discuss these matters with those who have worked with and in the defence industries, many of them argue that these arrangements are just a fact of business life. If one wishes to export military equipment or services to some parts of the world, the local custom means that orders will need to be facilitated by additional payments and the price charged takes account of that. That has a number of security implications. The receiving country is not necessarily obtaining the most appropriate capability or the best value product. The sale may go to the international company that offers the best bribes. If a defence company depends on such techniques, itis likely that they will produce less effective products because they are not exposed to full market competition. That means that our own troops, who will be enjoined to help exports by buying British products, may be among those who ultimatelysuffer as a consequence of corrupt practices in export sales.
	There is also the question of what effect such corrupt practices have on the nation to which sales are made. On 11 January 2007, we debated the DfID White Paper Making Governance Work for the Poor. In Chapter 3, a compelling case is made for why corruption is bad for the developing world. I shall not repeat its arguments, but undermining good governance is not a recipe for future stability, so we sow the seeds of future security threats when we permit bribes to happen. The OECD working group report this week was right when it stated:
	"The Working Group underlines in this respect that bribery of foreign public officials is contrary to international public policy and distorts international competitive conditions".
	However, another aspect worries me. We rightly take pride in the integrity of our public servants in the UK, yet arms sales are conducted on a Government-to-Government basis. Indeed, within the Ministry of Defence, there is a body, the Defence Export Services Organisation (DESO) whose only role is to promote British arms exports. It is staffed by a mix of civil servants, military personnel and seconded industrialists. It is a strange organisation to find in a ministry of defence, and I believe it should not be there, but it is, and we must accept that. If bribery takes place in arms deals, it is difficult to see how DESO can operate without being at least aware of it. Exposure to corrupt practices that are not followed up may tempt some down the road to corruption. We should protect the integrity of government abroad and in the United Kingdom.
	How do we ensure that corruption in the official arms trade ceases? We need two things: transparency of accounts, so that everybody can see what the costs are and who is getting the cash, and a clear set of rules that are enforced. This Corruption Bill can clarify the rules. We need to encourage companies to make sure that they are not undermining Governments through corrupt payments. We need to do so much more urgently in the light of recent events and the very strong criticism that we have received from allies through the OECD. We have an opportunity with the Bill to respond positively to the OECD criticisms and, if we get it through, we could achieve something tangible for the supplementary phase 2 bis review that the OECD is to undertake. I welcome and strongly support the Bill. We cannot afford any more delay in getting an Act.

Baroness Whitaker: My Lords, I declare an interest as a member of Transparency International UK's advisory council, which I thank for its high-calibre work on the Bill. I support the Bill very warmly. A coherent law of corruption has been a long time coming and, as your Lordships have heard, the Government's eventual attempt in 2003 was not found to be up to the task by the scrutiny committee of which I was a member. As the noble Lord, Lord Chidgey, said, we found that the 2003 draft Bill was neither adequate in scope, nor, most importantly, intelligible to the business community that would have to operate it. It also shared the narrow perception of corruption in the Law Commission paper, which was that the principal issue was the domestic UK dimension. It was as if globalisation did not exist, as if post-colonial western interests had never shored up greedy dictators and enabled them to loot their countries' Exchequers, as if powerful, rich companies had never colluded with developing countries' public officials to produce white elephants of public expenditure or to reinforce a clientele culture where petty bribery is necessary to obtain any service, as the noble Lord, Lord Chidgey, so powerfully described.
	These are the real and far-reaching issues of present-day corruption worldwide. I add another figure to those cited. The World Bank estimates that, globally, bribery for public procurement bids is at least $200 billion a year and that total bribery of the public sector from private sector companies and individuals might be as much as $1,000 billion. That would pay for a lot of roads, health centres and schools. It would save many lives. Another casualty of such pervasive corruption is democracy itself: public goods and services are not transparently and equitably delivered and redress through the systems of justice is barely available.
	That much larger consideration of the harm done by corruption is why the international organisations such as the OECD and the UN brought forward instruments, universally supported and adopted. We modernised our law to criminalise bribery overseas, which is welcome, but the OECD review committee still finds that UK implementation of the convention is impaired, as we have heard, and whatever our re-arrangement of enforcement machinery, there has not been one prosecution under such legislation as we have. This is why the All-Party Parliamentary Group on Africa, in our report The Other Side of the Coin recommended a new Bill by the end of last year. The Tanzanian Government have had sufficient political will to enact legislation and prosecuted 50 of their677 investigations in 2005.
	Well, that did not happen here, as noble Lords have explained. Why do the Government not realise the importance of this? If it is because the Home Office, the lead department, quite understandably, has little experience of the devastating consequences of corruption overseas, this should have been changed by drawing more on the experience of the Department for International Development—another recommendation of The Other Side of the Coin.
	Optimists hoped that the Government's very positive response to this report would result in a new corruption Bill, of the sort that the noble Lord, Lord Chidgey, has so eloquently described, not another postponement and a referral to the same organisation. I see that consultation with business is not included in the new terms of reference and I hope that the Minster can assure us that this will be remedied. We owe speedy, intelligible legislation to our many transnational companies that observe the provisions of the OECD convention, to those that want to preserve the good reputation of the City of London, and to those that want to increase investment potential everywhere. I quote Ms Karina Litvack, a senior executive of F&C, on whose committee of reference I sit:
	"for long-term investors, bribery and corruption distortand destabilise markets, expose companies to legal liabilities and reputational damage, disadvantage non-corrupt companies and reduce transparency for investors seeking investment opportunities".
	The director of the Serious Fraud Office himself, who had to decide to scrap the investigation into the activities of BAE Systems' in Saudi Arabia, is reported in the Financial Times less than a month ago as saying that our anti-corruption laws urgently need to be reformed to cope with modem international business practice. Does not that make the case of the noble Lord, Lord Chidgey, compelling?

Lord Dykes: My Lords, it is a great pleasure to follow the sensible words of the noble Baroness, Lady Whitaker, in also calling for an urgent reaction by the Government to these matters. In this debate there are noble Lords representing different parts of the House but only one Conservative. The noble Lord, Lord Kingsland, who is not in his place but was here briefly at the beginning, positively welcomed the Attorney-General's announcement to abandon the SFO investigation into the arms deal with Saudi Arabia. That makes me proud of the remarks of my noble friend Lord Thomas of Gresford on the Front Bench, which were in total contrast to the reaction of the Conservatives in this House.
	I am sorry to have to say this, but the stench of that abandonment of the investigation still lingers over the MoD, the Government, No. 10 and the Attorney-General's Office. People will not easily and lightly forget what happened on that dark day for this country. The reasons given for it are totally unconvincing. The Government need to return to the matter and give us further answers.
	That is not the direct subject of the Bill, although it is an important background component. I, too, add my warmest thanks to my colleague and noble friend Lord Chidgey for being the inspiration behind the Bill. I heartily endorse the idea of the Bill enthusiastically receiving a Second Reading. My noble friend has done a great deal of work on this. His background in industry and engineering, combined with many years spent in other countries representing legitimate British corporate interests—and very respectable ones at that—has given him unrivalled experience in these matters. His co-operation and work with Transparency International have been second to none in producing what I regard—although I am not a legal expert on these matters, so I am guessing some of it—as an extremely well balanced Bill. The Government should encourage it and proceed with it from today.
	I do not intend to go into very great detail on the Bill's contents, except to say that I strongly agree with what the noble Lord, Lord Neill, said about facilitation payments. That needs to be clarified and worked properly in the subsequent stages of the Bill. I hope that the Bill will go into Committee as soon as possible so that these matters can be dealt with.
	I turn to the sad events of 14 December and the subsequent comments of the OECD in March this year. We need to return to the contradiction expressed by the noble and learned Lord the Attorney-General that definitely no aspect of economic interest—or national interest in that sense—was involved and that those factors were definitely not taken into account in the judgment. The Government's answers on these points are very unconvincing. I was reflecting on that when my noble friend Lord Thomas of Gresford said:
	"I protest that the public interest in the prosecution of international corruption is of the highest order and, if we permit international corruption to continue in any way, or seem in any way to be giving a go-ahead to a large British industry, however much that may be in the economic interests of this country, we are damaging international relations in the broadest sense".—[Official Report, 14/12/06; col. 1713.]
	That matter must be returned to.
	We now have the impending visit of the OECD investigation team. I am not sure whether a date has been set; perhaps the Government can give us an answer. In its statement on 14 March it was extremely critical of the Government's position: the failure to keep up with other countries in the international convention and the agreement, which has been signed and ratified by so many countries. We have fallen behind in our obligations.
	On 1 February I said—forgive me for repeating it:
	"Corruption of any kind—even the thorny problem of finding a definition of it that will stand up to searching analysis—is a hard item for parliamentarians to deal with".—[Official Report, 1/2/07; col. 364.]
	I made my maiden speech in this House on 16 July 2004 and reflected on the enormous Joint Committee report, which we all remember, and the Government's poor and disappointing response to it—although they are entitled to make a number of technical points, which some would regard as very valid. So much time has now elapsed that it is really high time that the Government made rapid progress.
	In summer 2003 the Government rejected most of the Joint Committee's recommendations but insisted on keeping the agent/principal formula. That very important matter also needs to be gone into profoundly in Committee.
	The government response stated that,
	"as regards the central issue of the definition of corruption, we do have reservations on the proposal of the Joint Committee ... we have not abandoned the agent/principal approach proposed by the Law Commission for reasons which we detail below".
	But the Government can now make progress without once again referring the whole business back to the Law Commission. That would be cause a delay of several years. That is unacceptable bearing in mind the extremely expert work done by Transparency International and other bodies, including our overseas friends, with their technical and legal suggestions on how to deal with definitions, the relationship between agents and principals, the definitions of the measurements of money passing hands unlawfully and so on.
	Transparency International underlined that when it presented the draft text. It stated that,
	"The Attorney General's announcement of the decision of the Serious Fraud Office to discontinue the criminal investigation of BAe Systems' role"
	was a major part of the immediate background. It is not just a side issue that we can now forget; it is central, although not a direct part of Bill's text. In the last part of its introductory letter of 14 March, Transparency International stated that the Bill,
	"aims to reform the law of bribery in a way that will be understood by police, prosecutors, jurors, the private sector and the general public. It defines bribery by reference to the improper conduct that results from a bribe and includes a number of modern features of anti-corruption law, including explicit offences of bribing foreign public officials; of foreign bid-rigging"—
	I am glad that that was referred to earlier, because it is a huge area needing complex supervision—
	"and of fixing sporting events".
	I am delighted that my noble friend Lord Chidgey has also included that matter in the Bill. Transparency International continued:
	"It includes a requirement for UK companies to take steps to ensure that their foreign and associated companies do not commit corruption offences; and a duty to report suspicions of corrupt behaviour in the public sector".
	I notice that there are five Liberal Democrat speakers in this Second Reading debate, a number of Cross-Benchers and speakers from the government Benches. I hope that the Minister will be able to give a very positive response today to the growing clamour to respond not only to the OECD's strictures, instructions and requests that we behave properly in terms of international law and the conventions that have been signed and ratified but that we produce our own solid and convincing legislation as soon as possible.

Lord Condon: My Lords, I, too, congratulate the noble Lord, Lord Chidgey, on the Bill and support it. My contribution to your Lordships debate relates to Clause 5, "Corruption in sport". I declare an interest as chairman of the Anti-Corruption and Security Unit of the International Cricket Council and I also give ethical compliance advice to other international sporting bodies.
	Is there an ongoing problem with corruption in support? If there is, will Clause 5 make a beneficial contribution to dealing with the problem? There certainly is a significant challenge to the integrity of sporting events by sportsmen and others fixing the result or part of a sporting event to enable a betting coup. Much has been achieved by national and international governing bodies for sport to minimise or prevent the problem, but a great deal remains to be done.
	The roots of the problem are very basic and very simple. In recent times, the coming together of three developments has created a fertile and tempting environment in which it is relatively easy to fix a sporting event, or part of it, for betting purposes. First, visual imagery of live sporting events is now omnipresent through digital and satellite TV, computer screens, mobile phones and other handheld devices. So at any time in any place in the world, gamblers can watch and monitor the progress of live sporting events on a screen.
	Secondly, and simultaneously, gamblers can now bet via a mobile phone, online or in person with betting exchanges, betting shops or on-site at sporting events. In some countries, the betting is with unlicensed and indeed unlawful bookmakers. That betting is also 24 hours a day worldwide. Instant gratification or disappointment for gamblers is provided by watching and betting on live sporting events 24 hours a day anywhere in the world.
	The third development, in some ways the most sinister and important, is the opportunity now to bet on who will lose as well as who will win during a sporting event. Although a sportsman cannot guarantee that he or his team will win, he can most certainly guarantee that they will lose. That has transformed sporting gambling and the potential for corruption in sporting events.
	The tempting and very profitable prospect for a corrupt sportsman is that working alone or with others he can fix the outcome of a sporting event, or part of it, and achieve a very significant betting coup. The betting analogy that I often draw is that the corrupt sportsman creates the equivalent of knowing in advance when the roulette wheel is going to land on red or black. Imagine the betting potential if you knew that. Even better, by fixing a part of a sporting event—say, fixing to bowl two wides in a particular over of a cricket match—he creates the equivalent in betting terms of knowing in advance when the roulette wheel is going to land on an individual number, thus enabling a massive betting coup because of the long odds that you can obtain on such an event.
	In cricket in the 1990s, match fixing brought the international game to its knees and disgrace to cricket legends such as Hanse Cronje and other international captains. The problem threatened the integrity and financial structure of the game. Some of that match fixing was linked to organised crime and even terrorism. But cricket is not alone now. Horse racing, soccer, tennis and other sports all have their problems. The sums of money involved are huge. In some countries, it is now more lucrative to engage in sports corruption than drug dealing or robbery. Up to $1 billion is bet worldwide on a single one-day international cricket match in some important tournaments such as the World Cup.
	If that is the background and the current challenge, how will Clause 5 or something like it contribute to the solution? Clause 5 is a valiant attempt to make a real contribution and I congratulate the noble Lord, Lord Chidgey, on raising the profile of the problem and including a response in the Bill. However, I have some concerns. In particular, I feel that the clause is too ambitious and too wide in breadth of concept by seeking to protect the integrity of sport and by severing any causal connection with gambling as the motivation for the corrupt behaviour.
	When the Gambling Act 2005 was drafted, I encouraged the inclusion of a provision to deal with sports corruption linked to gambling. I am very pleased to say that Section 42 of the Act creates the offence of cheating at gambling. In essence, a person commits an offence if he cheats at gambling by actual or attempted deception or interference in connection with,
	"a real or virtual game, race or other event or process to which gambling relates".
	I realise that the Act is intended to protect the integrity of gambling first and foremost and that Clause 5 is intended first and foremost to protect the integrity of sport, but without the linkage to gambling as the motivation for the corruption, what else might Clause 5 embrace?
	Is Clause 5(3)(a) intended to include, for example, challenges to the integrity of a sporting event through performance-enhancing or performance-inhibiting drugs for sportsmen or animals taking part in an event? It could be argued that, as drafted, it probably does. Will Clause 5 be able to distinguish between corruption and extreme gamesmanship? Both may threaten the integrity of a sport, but not necessarily to the point of requiring criminal sanctions. What if a player, through his behaviour, falsely achieves a benefit that alters the outcome of a sporting event? Let us say in soccer that he blatantly dives and gains a penalty or gets an opposition player sent off. His team wins, and wins promotion or avoids relegation, or gains entry to a European competition with massive financial benefit to him and the team. This is a threat to the integrity of the sport, but should it be embraced by the criminal law? The racial taunting of an opponent in sport is most certainly a threat to the integrity of a sport, but could it be embraced by the clause as drafted?
	The noble Lord, Lord Chidgey, is to be congratulated on raising the profile of corruption in sport, and I support his motivation, but I have some reservations. I think that the clause should probably be rethought. A link should be re-established between the threat to the integrity of sport and the underlying motivation for such action; for example, to enable a betting coup. I am also concerned that the effect of the clause will be difficult to limit and will unacceptably blur the lines between corruption and extremes of gamesmanship. I argue that the latter should be dealt with through the disciplinary processes of national and international governing bodies for sport and not through criminal law. In essence, however, I support the motivation behind the Bill, and I congratulate the noble Lord on bringing it forward.

Lord Goodhart: My Lords, I should mention that I am a member of Transparency International (UK). My noble friend Lord Chidgey has done us a great service by introducing the Bill at a critical time in the battle against international corruption. We are lucky to live in a country where corruption is notvery common. We rank No. 11 in the Transparency International league table of corruption—No. 1 being the least corrupt. Half the countries that are better than us are Scandinavian, and the rest are all countries with relatively small populations.
	The last major corruption trial in this country was the Poulson case in the 1960s. However, the relative absence of corruption in this country owes no thanks whatever to the existing laws on corruption, which are based on the common-law offence of bribery, added to by short Acts of Parliament in 1889, 1906 and 1916. Those laws were given extraterritorial effect, but otherwise not altered, by Part 12 of the Anti-terrorism, Crime and Security Act 2001. Part 12 was, of course, the basis of possible charges relating to the Al Yamamah contracts.
	The relative absence of corruption in the United Kingdom has made us complacent about the total inadequacy of our anti-corruption laws. It ignores the fact that in many countries corruption does terrible damage, particularly in developing countries. Corruption is a poison that quite literally kills people; for example, by denying medical treatment to those who cannot pay bribes to the providers of the treatment. Corruption in the judicial system destroys the rule of law. I saw this when I served on an International Bar Association mission to Kenya in 1995 to consider the effect of corruption on the Kenyan judicial system.
	Without the rule of law, democracy is completely unworkable. Corruption also directs into the Swiss bank accounts of the families of a President Mobutu or Abacha money that should have strengthened the economy of a developing country. We need laws on corruption in this country that could serve as a model for other countries, not the inadequate laws that we now have. Why has nothing been done to improve our law? No Government for the past 90 years have enacted legislation to strengthen our laws against corruption. The Law Commission published a consultation paper in 1997 and a draft Bill in 1998. As happens far too often to Law Commission Bills, this Bill was put on the back burner. It took five years, until March 2003, for the Government to publish their own draft Bill, which was in essence the same as the Law Commission's Bill of 1998. The Government referred that Bill to a Joint Committee for pre-legislative scrutiny. In July 2003, the Bill received a damning report from the Joint Committee and went no further, but it took almost another three years for the Government to publish a new consultation paper.
	In a Written Statement on 5 March 2007, only some 10 days ago, the Home Secretary said that,
	"no consensus has emerged from the consultation as to what the scheme of new offences should look like ... I regret to conclude that there is insufficient support for any one particular model to justify its being submitted to Parliament at this time".—[Official Report, Commons, 5/3/07; col. 116WS.]
	What does the Home Secretary do? Having failed in his duty to take a decision that could have been difficult but which was plainly necessary, he sends the subject back to the Law Commission; so 10 years on, we are back at square one. It will take at least two years to come up with a report, which is unlikely to achieve consensus, so no doubt there will be further delays while the Government prepare a new draft Bill, conduct consultations of their own, arrange more pre-legislative scrutiny, and so on.
	This is an intolerable situation. We need legislation and we need it now. Transparency International (UK) explained with conviction and clarity why this was needed and needed now in written evidence submitted to the Joint Committee in 2003. It said:
	"We must maintain and be seen to maintain the highest standards of business integrity in business and public sector so as to underpin global public confidence in the UK's dominance in financial and trade markets ... The UK law on corruption is in urgent need of reform to meet these expectations. On the domestic front, the law enforcers have found the patchwork of century-old statutes and common law to be an ineffective means of curbing corrupt practices. Internationally, the UK has barely been able to abide by the obligations to which we have subscribed in the OECD Anti-Bribery Convention. It is therefore particularly important that the reformed UK legislation is consistent with our national commitments, is comprehensible to a wide audience and should work as effectively as possible in a modern legal context, especially within the European Union".
	Four years on, that memorandum from Transparency International (UK) states absolutely what is still the position.
	I would add only that now it is all too clear that the United Kingdom is unable to abide by its obligations under the OECD conventions. On Wednesday evening, the OECD published an extraordinary and humiliating reprimand of the United Kingdom. My noble friend Lord Chidgey referred to this. Again, I shall read a couple of short passages to convey the full flavour. The OECD said that,
	"the 2005 Phase two report on the United Kingdom recommended, as did an earlier 2003 Working Group report, that the UK enact modern foreign bribery legislation at the earliest possible date. The Working Group is seriously concerned that this recommendation, which reflected deficiencies of UK law on foreign bribery, remains unimplemented ... The recent discontinuance of a major foreign bribery investigation concerning BAE Systems plc and the Al Yamamah defence contract with the government of Saudi Arabia has further highlighted some of these concerns. The Working Group notes that the UK has stated that the discontinuance was based on national and international security considerations and that the matter is subject to judicial review in the UK. The Working Group underlines in this respect that bribery of foreign public officials is contrary to international public policy and distorts international competitive conditions. In accordance with Article Five of the Convention, in exercising prosecutorial discretion, parties to the Convention shall be mindful of their obligations and of the object and purpose of the treaty. The Working Group welcomed the additional explanations from the UK authorities and the openness of the UK delegation. Nonetheless, it maintains its serious concerns as to whether the decision was consistent with the OECD Anti-Bribery Convention".
	That concern is shared by many others.
	We cannot wait another four or five years for a corruption Act which so obviously and urgently we need. My noble friend's Bill is available now. A great deal of expertise has gone into the content and the technical drafting. I call on the Government to give it support and time, and if necessary to amend it. If they are not willing to do this, the least they can do is get on with the drafting of their own Bill, give it scrutiny in the autumn and get it through Parliament early in the next Session. That Bill must write into our laws our obligations under the OECD convention.

Lord Jay of Ewelme: My Lords, I join others in congratulating the noble Lord, Lord Chidgey, on bringing forward the Bill. I join others, too, in thanking Transparency International for the role it has played in this. I also thank it more broadly for the work it does in encouraging good governance and transparency.
	I was the Prime Minister's personal representative, or Sherpa, for the G8 summits in 2005 and 2006, including the preparations for the summit at Gleneagles, in which Africa was one of the main subjects on the agenda and corruption an important part of the debates we had. There were two aspects to that. The first was to encourage African countries to tackle corruption seriously as part of good governance. In the chairman's statement after Gleneagles, we agreed,
	"to give enhanced support for greater democracy, effective governance and transparency, and to help fight corruption".
	The second aspect of our debate on this point was to put our own G8 house in order, without which we recognised that we would not have the moral authority to persuade others in the developing world to do so. The G8 Africa Action Plan states that we will:
	"Reduce bribery by ... rigorously enforcing laws against the bribery of foreign public officials, including prosecuting those engaged in bribery".
	I have no doubt that our ability to persuade others to accept those commitments was due in good part to our own strong reputation in countering corruption. I have no doubt at all that the strengthening of good governance, including action against bribery and corruption, is hugely in our interests and the interests of this country. I have no doubts either that it is hugely in the interests of our country that we should be seen to be in the lead at the front of the pack in ensuring that that happens. That is true not just so that we can exert moral suasion on others, important though that is; nor just the effect that it has on poverty in the developing world, as the noble Lord, Lord Chidgey, and others have eloquently set out—hugely important though that is, too; but also because a reputation for a tough stance on bribery and corruption will help other British interests nearer to home. It will help us to fight international crime and terrorism. It will strengthen the role and reputation of the City of London and, indeed, our financial system more generally. Those are two just examples—other noble Lords have given others—as to why a robust approach to bribery, corruption and other malpractice is so much in our interest and why we have a strong interest in leading the way internationally.
	I ask myself two questions. Does Britain now have the necessary legislation and the reputation to ensure that it is at the front of the pack and therefore can advance its interests? If not, how can we take the necessary steps to ensure that we do get there? The answer to the two parts of the first question is that we do not have the right legislation at present and that there are concerns about our reputation. I do not want to exaggerate that second point. Britain's basic reputation for democracy, openness and probity is immensely strong, and rightly so. However, I believe that there is a problem in this narrower field of action against bribery and corruption. There are, as other noble Lords have said, two aspects to that: the need to bring our legislation into line with the requirements of the OECD convention and the repercussions of the decision not to proceed with the investigation into the Al Yamamah case.
	To take the second point first, I do not pretend to know the details of the case, and I do not wish to comment on the details of the case. In a real sense, the details of the case are not the point here. What matters is the perception that that decision shows a less than full commitment to counter bribery and corruption. That is what needs to be put right. As for the first point, it is now getting on for 10 years since the UK ratified the OECD convention. However, our legislation is still held not to be compliant despite the recommendations, in 2003 and 2005, from the OECD and the Law Commission that it is the Government's duty to update and modernise their laws.
	Those two aspects came together in the conclusions earlier this week from the OECD's working group on bribery and with a proposal to carry out a supplementary review of the UK's present stance in relation both to the state of our laws on bribery and to the discontinuance of the Al Yamamah investigation. As it happens, I was at the OECD earlier this week at the time of the examination of Britain and I had discussions with senior officials, including the Secretary-General of the OECD. As one can imagine, this was the talk of the town. But one of the main sentiments of those conversations was a kind of puzzlement at how Britain had got itself into this position. Fortunately, however, there is a way to get us out of that position. That solution lies with the Bill introduced by the noble Lord, Lord Chidgey.
	I am usually hesitant in supporting or proposing new legislation. I am inclined to think that the time and resources devoted to drafting and piloting new legislation through Parliament could often better be spent ensuring the implementation of and compliance with existing legislation. However, this is one of those occasions where legislation is necessary and desirable, for the reasons I have explained.
	I do not wish to comment in detail on the Bill as that is for Committee stage, but I believe that the Bill is professionally and impressively drafted. The subject matter is complex and will need debate at the proper time. What is clear, however, is that the timetable presently envisaged by the Government—with further reference to the Law Commission for further detailed consideration of the issue, with a Bill to be proposed in 18 months or two years—is simply too slow given the situation that we are now in. Much detailed work has already been done. Would it not be better for the Government to agree to work quickly now, on the basis of the Bill before us, to pass the necessary legislation and avoid the growing sense that the United Kingdom is not sufficiently serious about an issue that really does matter to the furtherance of our important interests both at home and overseas?
	I hope the Minister will be able to say that the Government will at least seriously consider that course of action. Meanwhile, I again congratulate the noble Lord, Lord Chidgey, on bringing forward the Bill and I support its Second Reading.

Lord Thomas of Gresford: My Lords, I also join in congratulating my noble friend Lord Chidgey on introducing a very important and far-reaching Bill. I agree with the sentiments expressed by the noble Lord, Lord Neill, that it is perhaps disturbing that it has taken a private initiative to bring these matters forward. Notwithstanding the fact that the current law against corruption comprises three Bills which were passed by Liberal Governments, I have to tell noble Lords that, from a professional point of view, I consider the law to be in a mess. I also share the indignation expressed by my noble friend Lord Goodhart at the length of the delay.
	In 1995, Lord Nolan's committee, newly set up, asked the Law Commission to clarify the law on bribery, and two years later the commission produced a consultation paper. In June 1997, in the early days of the current Government, the Home Office recommended a single offence of corruption. In December 1997, the OECD convention was agreed and ready for signature. So, we are going back 10 years since all that happened. The Law Commission's report, published in March 1998, expressly stated that it could not take into account the convention, which dealt with the bribery of foreign officials and the elimination of bribery in international affairs. The trade Minister stated that UK law was consistent with the convention notwithstanding that even then it was already 90 years old. The convention was ratified by this Parliament on that basis—that our existing law was compatible.
	Mr Jack Straw's June 2000 White Paper, Raising Standards and Upholding Integrity: the Prevention of Corruption suffered the same fate—as no doubt his recent White Paper will suffer the same fate—of ever-increasing delay. As my noble friend Lord Goodhart pointed out, that White Paper was only an appendage to the Anti-terrorism, Crime and Security Act 2001 which we considered in the context of what had happened on 9/11 in the United States. Only then were the existing, highly unsatisfactory laws extended to offences committed by UK nationals and UK companies abroad. Only a very limited extension of the unsatisfactory laws took place at the time. We then had the draft corruption Bill in March 2003 which was heavily criticised by a Joint Committee on the basis that it was confused with complex laws, the sort of complicated laws referred to by the noble Lord, Lord Stevens, a moment ago.
	In December 2005, we had a Home Office consultation paper, and, finally, a few days ago—no doubt as a result of this Bill coming before the House—Dr Reid stepped in with his new initiative to send the matter back to the Law Commission on the basis that,
	"no consensus has emerged from the consultation as to what the scheme of new offences should look like ... there is insufficient support for any one particular model to justify its being submitted to Parliament".
	He went on to ask the Law Commission to look at the,
	"full range of structural options".
	The Home Secretary states that there is no consensus on the model. This is not rocket science. We all know what bribery and corruption are and no right-thinking person is in favour of it. It should be the easiest matter—I will come back to this—to carry out the recommendations set out in Dr Reid's statement. Indeed, they are contained in this Bill.
	One of the strengths of the Bill is that it does not require the Attorney-General's consent to prosecution. The government draft Bill in 2003 did require his consent. Why? The Attorney-General's consent is not required for prosecutions for fraud or, under existing common law, in corruption cases. We wondered why in 2003, but now we know: his consent enables a political dimension to enter into the issue of investigation and prosecution. I am not going to leave the Al Yamamah decision entirely to one side. I saw poor Mr Robert Wardle, the director of the Serious Fraud Office, trying to defend what he described as "his" decision on television the other night.

Lord Thomas of Gresford: My Lords, I wonder what is sub judice. Certainly the Al Yamamah investigation is not sub judice; it has been dropped. I agree with the Minister, however, that I would have preferred the Attorney-General to have been present at this time, because I do not wish to criticise him in his absence. But he did tell us that he had personally investigated the files in that case over a number of days and had concluded that there was very little chance of success in a prosecution. We heard fromMr Wardle that he had had discussions with our ambassador in Saudi Arabia and with the Prime Minister, and yet he presents it as his decision.
	I agree with those noble Lords who have referred to the international reputation of this country, which is one of our greatest assets. My noble friend Lord Garden and the noble Lord, Lord Berkeley, have referred to it; but I thought that the noble Lord, Lord Jay, summed it up extremely well when he talked about our moral authority. We should be leaders of the pack. We should be exemplars to the world. If we present ourselves as a democratic country with high standards, we should ensure that we appear in that way. As he spoke, I thought to myself of how we are celebrating the ending of the slave trade 200 years ago by a Member of this House. I thought: how do we appear in Africa, where there is so much corruption, when we ourselves have not sorted out our stance?
	I come to the Bill. I have already referred to Dr Reid's statement. These were his terms of reference, which he has now sent to the Law Commission:
	"The review will make recommendations that ... provide coherent and clear offences that protect individuals and society and provide clarity for investigators and prosecutors ... enable those convicted to be appropriately punished ... are fair and non-discriminatory in accordance with the European Convention on Human Rights and the Human Rights Act 1998; and ... continue to ensure consistency with the UK's international obligations".
	That is what the Bill offers—precisely those four points.
	I wonder whether I might spend a moment looking at some of the Bill's provisions. Instead of putting forward a single offence of corruption, it very properly divides corruption into a number of areas. Clause 1 deals with the offering of a bribe with the intention of influencing that person or another person to exercise a function improperly. I took on board the criticisms of that made by the noble Lord, Lord Neill, in his concern over having bribed a doorman on one occasion. It struck me that "exercising a function improperly" could be defined as including doing one's job, but only on payment of a particular sum of money. That would be performing a function improperly.
	The second clause deals with corrupt transactions involving agents and covers much of the ground of existing law. The bribery of foreign public officials in Clause 3 covers very much that which was set out in the 2001 Act, and the foreign bid-rigging of course covers an area that is not at the moment clearly stated. As one of your Lordships pointed out, it is important that the criminal law is clear and has clarity, and I believe that Clause 4 does precisely that. I also agree with the noble Lord, Lord Condon, that the corruption in sport clause, Clause 5, covers an area that has so far not been touched by any of our existing legislation or case law to any great degree.
	The one clause that needs a bit more scrutiny is Clause 6, on the presumption of corruption. It sets out a presumption that was abolished in the Government's draft Bill, and I am not sure that it should be introduced in this one. But that is a matter—one hopes, if this matter goes to Committee—that we can discuss and tease out. The duty to report protects whistleblowers, and the failure to report is another protection in that way.
	The Bill as a whole answers the problems that the existing laws throw up. It is a vehicle that we can take forward with confidence. I commend my noble friend for bringing it forward and I offer him our full support.

Lord De Mauley: My Lords, I join other noble Lords in thanking the noble Lord, Lord Chidgey, for introducing the Bill and explaining it and its background so comprehensively. As we have heard from many speakers, if not all, during this Second Reading debate, the Bill is extremely timely and the arguments in its favour are strong. I am glad that the noble Lord has given us an opportunity to debate it and I congratulate him on proposing a solution to the pressing need for a consolidation and a strengthening of our legislation against corruption.
	My noble friend Lord Bowness asked me to offer his apologies, as he, too, would have spoken in the Bill's favour. Like the noble Baroness, Lady Whitaker, and the noble Lord, Lord Goodhart, who have both spoken so forcefully today, he is on the advisory council of Transparency UK. Unfortunately, he is unable to be in his place and speak today.
	As we well know, there are many ways in which corruption can cause damage, both at home and abroad. On a national level, corruption, or even the perception of corruption, lowers public trust in our institutions and organisations. We have only to pick up a newspaper at random to see how the Government or a public body, such as a consumer watchdog or a quango, can be damaged by a lack of belief in their integrity. Private companies, as several noble Lords have said, are equally damaged by a loss of consumer confidence in their products and by the inefficiencies to which corruption leads.
	Overseas, in many cases, these problems are multiplied. We at least are fortunate in this country to have a robust justice system and vibrant non-governmental organisations to watch out for corruption and to press for further investigation. Other countries are not always so lucky. This House has heard much of the importance of ensuring that aid, for example, is actually spent on the projects for which it is intended. As the noble Lord, Lord Stevens of Kirkwhelpington, among others, said, there have been many reports of the braking effect that corruption has on an economy.
	So it is astonishing that we are having a Second Reading debate on a Private Member's Bill rather than a Government Bill. The Government acknowledged the need for a Bill as long ago as 1997—it was even in the Queen's Speech in 2002—yet so far they have been unable to achieve one. Since the Government came to power, we have had a Law Commission review, several further statements of intent from the Government and lots of consultation on draft Bills, yet we are no further forward.
	The Government have not only broken their promises in their well publicised press releases; they have also, as the noble Lord, Lord Chidgey, said in his opening remarks, which other noble Lords echoed, failed to fulfil their international obligations. In December 2003, the Government signed up to both the UN and the Council of Europe conventions against corruption, but the Bill that was intended to implement these commitments has been withdrawn. Why have the Government not felt it necessary to fulfil their obligation? How can we, as we should, take a lead in putting pressure on other Governments to act—indeed, often to enforce legislation that they have already enacted—if we do not have legislation in place?
	Turning to the Bill before us rather than what might have been, I am pleased that it aims to address the confusion and complexity of the extant corruption legislation in Clause 17 and repeal the old legislation on which we currently rely. Given that this simplification was one of the Government's previously stated aims, I hope that the Minister will be able to confirm that the Bill properly covers all the areas of the legislation that it repeals.
	Other noble Lords have raised the following important points, among others. The noble Lord, Lord Neill of Bladen, referred to his concerns—none of them insurmountable—such as the use of the word "impropriety", foreign bid-rigging and the duty to self-incriminate. The noble Lord, Lord Condon, spoke eloquently on corruption in sport; he raised concerns that I think could all be dealt with by amendment.
	I wish to raise a couple of specific concerns that I have. First, I do not think that Clause 6 implements the Law Commission recommendation that there be parity between public and private sector in the area of burden of proof. Accepting this recommendation becomes ever more important as the Government roll out their drive to contract out public services to non-governmental organisations and private companies. The distinction between public bodies and private organisationsor individuals is now too blurred in the provision of many public services to make the clause feasible or indeed wise.
	Despite the comforting words of the noble Lord, Lord Chidgey, I still have some concerns about the duty in Clause 11 to supervise foreign compliance with corruption law in the United Kingdom. Can we be absolutely confident that there will not be confusion over what would constitute "reasonable steps" to ensure that foreign contracted parties are following a corruption code that may be very different from their own national code or practice? What would be considered sufficient proof? If the foreign contracted party deliberately provided false information, to what extent would the UK entity take responsibility for checking the accuracy of that evidence? How far down the supply chain would the obligation extend?
	My concerns and those of other noble Lords notwithstanding, this is an important Bill. The Government would do well to take note that it cannot procrastinate much longer on this issue. Surely we have had enough discussion, consultation and draft Bills. One can find, with the click of a mouse, a draft Law Commission corruption Bill, a draft Bill from Transparency International and, of course, one from the Government, all with pages of analysis and criticism from various quarters.
	If this Bill does not make it to Royal Assent this Session, we shall be back where we started, with our legislation on corruption widely acknowledged to be inadequate and a Government seemingly unable to draft a Bill that achieves what even they have admitted is necessary.

Baroness Scotland of Asthal: My Lords, I add my voice to all those who have very warmly congratulated the noble Lord, Lord Chidgey, on bringing this Bill forward. There is nothing between us in terms of the importance of having robust corruption legislation; indeed, there is nothing between us in relation to the pernicious effect that corruption can have on the rule of law and the good governance of our countries. All noble Lords who have spoken in that regard spoke well, without exception. We have enjoyed some very fine speeches indeed.
	Since we all agree that corruption is a threat to the very foundations of democratic society and that constant vigilance is needed to ensure that we maintain our high standards domestically and play our full part in combating corruption overseas, the problem has been how to deliver that change. To combat corruption, we need to ensure that we have mechanisms in place to prevent, detect and punish those who commit corrupt acts. This requires joined-up action across government as well as the active participation of business and society at large. I welcome the highlighting of those issues by my noble friend Lady Whitaker. I am very grateful for the proper attention that has been paid to these matters during this debate, particularly in relation to the action on Africa.
	I was grateful to the noble Lord, Lord Stevens, for highlighting our efforts to tackle these issues. Last July, the Prime Minister appointed the Secretary of State for International Development to be the ministerial lead in fighting international corruption. That was a very important move. We have had some notable achievements, especially in combating corruption overseas. We have provided additional funding to assist the City of London Police and the Metropolitan Police to dedicate a team to investigating foreign bribery and money-laundering. Structures for targeting money-laundering by politically exposed persons have been strengthened. We have actively promoted responsible business conduct, both internationally—via taking forward initiatives in particular industries, such as the Extractive Industries Transparency Initiative—and by revamping the United Kingdom national contact point for the OECD guidelines on multinational enterprises. Much has been achieved. However, we accept that there is still much more that we can do.
	Our requirement for an effective regime for combating corruption is an effective criminal law. We already have extensive provisions in our law to criminalise corruption. In the strict sense, our corruption provisions cover the crime of bribery—the offering, soliciting, giving or receiving of illegitimate advantages to influence conduct—and we have the common-law offence of bribery. All these have been referred to. They are complemented by the various statutory offences in the Prevention of Corruption Acts 1889 to 1916. The noble Lord, Lord Thomas of Gresford, is right to highlight the Liberal achievement in that regard. These offences were amended by the Anti-terrorism, Crime and Security Act 2001, to put it beyond doubt that our law covered bribery of foreign public officials and to establish extraterritorial jurisdiction over UK nationals and incorporated bodies committing these offences overseas. We have not quite stood still in the way that some suggest.
	In addition, we have a range of provisions across our criminal law to criminalise corrupt practices in the wider sense of the word "corrupt". These include a common-law offence of misconduct in public office, fraud offences, the cartel offence in the EnterpriseAct 2002, and the cheating offence in theGaming Act 1845, with its successor offence in the Gambling Act 2005, to which the noble Lord, Lord Condon, made reference. These complement the specific law on bribery to provide a comprehensive law.
	Noble Lords will be aware that we are currently discussing in Committee the Serious Crime Bill, which also will assist with tackling corruption. In particular, it provides for the creation of serious crime prevention orders. These orders will be an effective new tool for law enforcement to prevent the harm that serious crime causes in all our communities. Noble Lords will recall that Schedule 1 to that Bill refers directly to fraud, corruption and bribery. It does so in Clauses 6 and 7 of Part 1 and again in Part 2. We are therefore making significant progress.
	However, I must emphasise that our existing corruption law is fully compliant with our obligations in the various international conventions on corruption, including the OECD Convention on Combating Bribery of Foreign Public Officials. Nor has our law been found to be inadequate by recent investigations or by the absence of prosecutions for overseas bribery. The lack of prosecutions is not unexpected. Only a handful of OECD convention countries have so far brought successful prosecutions. The Serious Fraud Office, the MoD Police and the City of London Police are investigating a range of cases. However, by their nature, such investigations take time.
	Many noble Lords referred to the criticisms that have been made. Perhaps the best that could be said by way of a verdict is that we are compliant, but could do better. It is the "could do better" part of the report that we have to look at with greater acuity. I take on board what was said by the noble Lords, Lord Neill and Lord Chidgey, and my noble friend Lord Berkeley in that regard.
	We need to make it clear that we share the concerns that have been expressed in this House that our corruption legislation—and, by this, we mean our bribery law—is old, overly complicated and fragmented. Our statutory corruption offences have served their purpose well, but we are absolutely committed to their consolidation, modernisation and fundamental reform. There is therefore nothing between those who have spoken in this debate today and the Government.
	Your Lordships will be aware that this Government have been actively striving to reform our corruption laws for a number of years—that was alluded to today. In 2003, we presented a draft Corruption Bill for pre-legislative scrutiny. That Bill was based on proposals made by the Law Commission arising from its work in the 1990s. It is now forgotten that those proposals were welcomed during consultation by the Law Commission and the Home Office. However, as noble Lords know, when the Bill was produced, it was heavily criticised by the Joint Committee that gave it its pre-legislative scrutiny. The Joint Committee recommended an entirely different basis for the scheme of offences, which the Government then found unworkable. It feels a little like Lords reform. We all agree that Lords reform is absolutely necessary; it is just that we seem to have real difficulties in coming to agreement on how it should take place.
	Having had the delight of representing the Government on innumerable Bills, I know the challenge and interest that are created when there is no consensus in the House between the parties on the form that the Bill or amendments should take. We need to bear in mind the practical difficulties where there is no real consensus.
	To take forward reform in December 2005, the Home Office issued a consultation paper. The summary of the responses to the consultation paper was published on 5 March. The consultation has revealed broad support for reform of our bribery law, but no consensus on how it should be reformed. It is clear that there is significant and influential opposition to the Government's draft 2003 Bill, and we have therefore concluded that that Bill is unsuitable for presentation to Parliament. However, it is also clear that there is fundamental disagreement between stakeholders on which of a number of differing models should be adopted. The Government have concluded that there is insufficient support for any one particular model to justify its being presented to Parliament at this time.
	I must take issue with the noble Lord, Lord Goodhart, just in one regard. He indicated that the Law Commission is likely to take about two years. The Law Commission has indicated that it will treat this review as a matter of priority. Its work should be complete by October next year. Every effort is being made to deal with this matter expeditiously. The Law Commission will have to look at all the different models that have been offered so far, together with any international models.

Baroness Scotland of Asthal: My Lords, we know that the Law Commission's range is wide. I am sure that there will be no resistance to looking at all models, from whichever place they come, in trying to get this right.
	We have a difficult situation, but there is, as has been said, total consensus that we need to do this and do it as speedily as we can. There is also consensus that, if we fail to do so, that will be deleterious in the long term, because there will be a lack of clarity. There is no disagreement among us about that. But the reform of our corruption law is not an easy task, as previous attempts have demonstrated. The truth is that bribery is a hard crime to pin down. It is vital that we get the reform right and that we do not inadvertently cover practices that are not and should not be criminal—an issue that was highlighted by the noble Lord, Lord Condon.
	We therefore announced, as your Lordships will remember, on the same day as we published the summary of the responses, that we were asking the Law Commission to undertake a thorough review of our bribery laws. It has been said that there was delay, but we do not believe that that is true. If one looks at the chronology, one sees that things have moved on, and moved on beneficially. I reassure those noble Lords who have been concerned that the 2003 Bill took too narrow a scope that the terms of reference for the new review require that the Law Commission makes recommendations that continue to ensure consistency with the UK's international obligations. It will compare our law with that in other countries and, in looking at the full range of structural options for a new bribery law, will consider the merits of an offence dealing separately with bribery of foreign public officials. I also assure my noble friend Lady Whitaker that the Law Commission will consult business as part of its review.
	We have also asked the Law Commission to look at the wider context on corrupt practices so that it will be clear how existing provisions complement the law on bribery. This part of the review will comprise a summary of provisions and not recommendations for reform. Referral to the Law Commission is the best course of action; the Law Commission is best placed to take forward and make a success of law reform in this field. We have asked the commission to prioritise its review and to prepare a draft Bill, so by the end of that period we shall have something to work on. In the light of that work, we will bring forward legislation as soon as we are in position to do so. Reform of our corruption laws is a difficult undertaking, but it is vital that we get it right.
	I sympathise with the objectives of the Bill before us today and welcome the contribution that it can make in informing our work, but I emphasise that it is not the product of the extensive consultations and reviews that are necessary and which the Government are embarked on. As I shall explain, we do not believe that this Bill establishes a workable or appropriate new corruption law. It certainly does not deliver the clarity required in a new law.
	Since I have only a few minutes left, I shall scan through in shorthand form some problems that will need to be looked at. I do not take issue at all with the Bill's objectives; it is absolutely right to safeguard integrity, and so on. But, with regard to the clauses at the start of the Bill that deal with the bribery offences, the scheme for those offences is overlapping and duplicating. The formulation of the offences fails to deliver the clarity sought; a line is not easily drawn between what should be considered criminal and what should not. The proposed new corruption offence in sport is not necessary or required to tackle fixing; bribery and gambling provisions criminalise fixing sufficiently already, as I think noble Lords indicated during the debate. There are more effective means of demonstrating our commitment to tackling corruption in sport than the creation of a new criminal offence. However, I absolutely understand why the provision is there, and those are issues that we can look at.
	We think, too, that the proposed new statutory duty to report public sector corruption may be somewhat problematic and not entirely appropriate. There is already a duty in the Civil Service code, and similar provisions will exist for other positions. We do not believe that the offence of failing to report is justified, since we have disciplinary proceedings already, which are a more appropriate and proportionate sanction. The Law Commission concluded in its last report that the presumption was no longer justified or necessary and we sympathise with its conclusions. We are already tackling cross-border hard-core cartels that engage in bid-rigging, and we do not believe that a new foreign bid-rigging offence is the best way forward. I listened with interest to what the noble Lord, Lord De Mauley, said as to how the offences worked together.
	There is a duty on United Kingdom companies to supervise their foreign subsidiaries. I heard what the noble Lord, Lord Chidgey, said about it not doing what we think it does, but we think that, if you disaggregate the way in which it is structured, it has that intent. However, I am very glad to hear that the noble Lord does not want it to have such intent. We can see that that needs a bit of work, too.
	An amendment to the Serious Fraud Office remit is, we think, neither necessary nor justified. The remit covers cases involving serious or complex fraud, and major cases of bribery will normally involve that. The SFO has already demonstrated an ability to prosecute in bribery cases.
	That was a quick canter through the issues. We agree in principle with much in the Bill but there is a lot of detail that we would have to unpack, and I think that there is agreement in the House that we would have to work very hard on it. But I make the commitment that this is not the Government being dilatory; we understand how important the matter is and wish to ensure that it is driven through. We are very conscious of the point that the noble Lord, Lord Jay, and others made about our reputation and the need to do all that we can, as we have always done—a point made by the noble Lord, Lord Neill of Bladen—to ensure that we are held in the highest esteem around the world. There is absolutely no difference between us on that. If at all possible, we would like to be the best.

Lord Chidgey: My Lords, I thank all those who took part in the debate for their contributions. I shall do my best to respond to the particular points raised by noble Lords in due course, rather than take up more time in the Chamber today. I thank the Minister, too, for addressing seriously the issues that have been raised—that is appreciated—and for her comments about the future progress that we can probably make. Many areas of this issue and provisions of the Bill merit more detailed examination, which we may well achieve by careful scrutiny of the Bill in Committee.
	On Question, Bill read a second time, and committed to a Committee of the Whole House.

Lord Lloyd of Berwick: My Lords, I beg to move that this Bill be now read a second time.
	It is only a week since we last discussed intercept in this House, on the first day in Committee on the Serious Crime Bill. Noble Lords might think that nothing new of importance could have happened between then and now but, if they did, they would be wrong. On Monday this week there was a hearing before the Joint Committee on Human Rights at which two witnesses gave very important evidence for today's debate. One was Sir Swinton Thomas, the retired Interception of Communications Commissioner, and the other Sir Ken Macdonald, the Director of Public Prosecutions.
	Sir Swinton made a powerful case for maintaining the status quo, largely on the lines of the report that he published a few weeks ago, which some noble Lords will have seen. To my mind the case made by Sir Ken, the Director of Public Prosecutions, for a change in the law was overwhelming. I shall come back to what he said in a few moments. Sir Ken Macdonald is not the only one to support a change in the law. Last week I gave a long list of others who also support such a change: the noble and learned Lord the Attorney-General, Lord Goldsmith; Sir David Calvert-Smith, a previous Director of Public Prosecutions; Sir Ian Blair; the noble Lord, Lord Carlile, the independent watchdog in these matters appointed by the Government, and so on. I shall quote a former chief constable of the West Midlands and Inspector of Constabulary, the noble Lord, Lord Dear, whom I am very glad to see in his place. He said that he had for 10 years or more been in favour of admitting this evidence and added:
	"It is interesting to see the tide not just turning but running strongly in favour of this proposal".—[Official Report, 7/3/07; col. 305.]
	Quite so.
	The first question that always arises in these debates is whether admission of intercept evidence would do any good: whether it would increase the number of suspects who can be brought to court and, it is hoped, convicted. Nobody, of course, suggests that it would lead to convictions in every case of serious crime, but it is common ground now that it would lead to more convictions in some cases of serious crime. That has been common ground ever since the Home Office review of February 2005; it is also the Minister's own view. She has told us on many occasions that she is altogether in favour of admission of intercepts if it can be done safely. She described it last week as,
	"a consummation devoutly to be wished".—[Official Report, 7/3/07; col. 313.]
	Sir Swinton Thomas is of the same view, though he expressed that sentiment in slightly more judicious language as becomes a retired judge. The question comes down simply to this: can we or can we not do it safely? Can we find a way of making evidence admissible without prejudicing what we already have? My answer is: yes we can.
	Two arguments are always used the other way, and no doubt we shall hear them again today from the noble Baroness, Lady Ramsay, whom I am very glad to see in her place. The first is that if criminals knew that their telephone conversations could be intercepted, they would cease to use the telephone and we would thereby lose a valuable source of intelligence. I do not doubt for one moment that telephone intercept is a very valuable source of intelligence—that, again, is common ground—but I suggest that there is nothing in the argument that we would lose that ability. We are talking here, after all, of serious organised crime committed by sophisticated criminals operating across national boundaries. Of course they know that their conversations can be intercepted; otherwise, they would not talk in the guarded terms in which they speak so often. They know that in every other country that evidence can be used in court against them; yet, they continue to use the telephone for communicating with each other to hatch their conspiracies because they have no other means of communicating with each other. It is fanciful to suppose that the habits of these criminals would change because the evidence was at long last to be made admissible in the United Kingdom as well as in every other country in the world.
	The second argument is that if intercept evidence were allowed in court, criminals would soon discover the methods by which it was obtained. This is what worries the security service and GCHQ. I assure your Lordships that I understand their concern, but the courts are not quite so naïve in this respect as some may imagine. In common with every other common-law country, we have developed a means of protecting sensitive information that is thought to be at risk in some way. The principle is called public interest immunity; there is nothing new about it. It is well understood in the courts. I do not say that it is used every day but it is used very frequently. The procedure is set out in Part 25 of the Criminal Procedure Rules 2005. If lawyers for the defence demanded to see documents that might disclose methods of intercept, the application would come before the judge who would hear the case and decide whether the documents should be disclosed. It is inconceivable that a judge would order documents to be disclosed, or information to be discovered, that would reveal methods used by GCHQ and other agencies. If the judge went off his head and did so order, the prosecution would at once appeal to the Court of Appeal, which would put the situation right. If the Court of Appeal went off their collective heads, there would always be an appeal to your Lordships' House. There is therefore nothing in the two main arguments against allowing intercept, which have been used so often.
	If anybody doubted the utility of intercept evidence, or our ability to use it safely, I hope that your Lordships will look at the position in the United States and Australia, on which the evidence ofSir Ken Macdonald is very revealing and important. In September 2004 he visited his opposite numbers in the United States and Australia. He talked to eight agencies in the United States and 12 in Australia. Everywhere he got the same message: it would make an enormous difference. I should like to read out a great deal of his evidence but I cannot; however, I shall read just two or three sentences:
	"Colleagues in the Department of Justice in the United States have told us that the majority of their major prosecutions now against terrorist figures and organised crime figures are based upon intercept evidence. I think it is well known that for the first time each of the five New York crime godfathers are in prison, each of them as a result of the use of intercept evidence. In Australia, I was told by the head of the New South Wales Crime Commission that prosecutors who did not rely on intercept evidence were not being 'serious' in this area of work".
	That evidence given by Sir Ken is amply borne out in the report by Justice, which refers to an observation of Mr Damian Bugg QC, the Australian federal Director of Public Prosecutions, who says:
	"We rarely now have a drug importation prosecution that does not have telephone intercept evidence in it. I can think of any number of prosecutions where we would have real difficulty in prosecuting without it—we just would not get the evidence".
	It is evidence of that kind which makes it difficult to understand the statistics which the Minister gave, as reported at col. 310 of Hansard.
	Sir Kenneth was asked about something that the noble Baroness said last week. It was put to him that the noble Baroness had said that,
	"the evidential use of intercept would not even add significantly to the number of convictions that can be secured".—[Official Report, 7/3/07; col. 310.]
	When asked whether he agreed with that, he said that he disagreed profoundly. Nowhere in those other jurisdictions has it been suggested that, because of the use of intercept in this way, the methods of those carrying out the interceptions have been revealed. The question then is: if those other countries can do it safely, why cannot we?
	Another arguments used by the noble Baroness last week was that, if we use intercept evidence, the prosecution would have to disclose everything, there would be a great mass of material, and that would add greatly to the length and cost of trials. That is not the case. Of course there is an obligation to disclose material that would help the defence or undermine the prosecution, but there is no obligation to disclose material described as neutral. That was the decision of the House of Lords not long ago in R v H, reported in 2004 Appeal Cases. Then there was the argument that we might run into difficulties under the European Convention on Human Rights. There was a reference to the principle of equality of arms. That does not touch on this question. The court of human rights has made it clear that there is no absolute right to disclosure; disclosure is always subject to the overriding interest of national security. That was decided in Rowe and Davis v United Kingdom in 2000.
	The noble Baroness said that, in a few years' time, present methods of intercepting conversations would be out of date and obsolete. Instead, we will have voice over internet protocol, or voice over IP. I am sure she is right that that is the way in which it is moving, but I am not sure how it affects the question that the House is debating now. To find out more about that, if I could, I had a conversation only last night with David Craig, who works for a Scottish company called Agilent Technologies. He was in San Francisco, and I was at home. The conversation took place by means of voice over IP. I could not notice any difference between that conversation and any that I have had over the telephone. He told me that voice over IP can be intercepted; it is more difficult to intercept than mobile phones or landlines, but it can be done. The problems are not insuperable. Indeed, about 150 companies worldwide have the capability of doing that. Whether or not that is so, I cannot see that it really affects this question. If there is to be new technology and we are going to be able to get intercept from it, by all means let us use it in court.
	Two other arguments were advanced by the noble Baroness. First, that the admission of intercept in court would in some way imperil the close relationship between the intelligence agencies and the law enforcement agencies. I have heard that argument advanced on numerous occasions, but I have never begun to understand it. She said that the intelligence agencies might not be willing to co-operate with the police once intercept was used evidentially, or at least that co-operation might be endangered. They are both government agencies; surely if the national interest requires the use of intercept to secure convictions, the intelligence agencies can be persuaded to co-operate with the police.
	Of course there will be resource implications, but if we are to be serious about convicting criminals, against whom there may be no other evidence, we must not let resource implications stand in the way. In fact, again Sir Ken Macdonald explained in his evidence that the use of intercept would be very cost-effective, because it leads to shorter not longer trials and to more guilty pleas. He gave some very interesting figures to bear out that view. I will leave the last word to Sir Kenneth:
	"Everybody without exception told us that this material is of enormous use. It is cheap, it is effective; it drives up the number of guilty pleas and it leads to successful prosecutions. We are convinced, and have been for a number of years, that this material will be of enormous benefit to us in bringing prosecutions against serious criminals, including terrorists".
	I commend the Bill to the House.
	Moved, That the Bill be now read a second time.—(Lord Lloyd of Berwick.)

Lord Boyd of Duncansby: My Lords, the Justice report, to which the noble and learned Lord made reference, tells us that one of the early examples of the use of intercept evidence was the trial of Mary, Queen of Scots, in 1586. She was convicted in the October of treason, following the interception of letters that revealed her knowledge of Babington's plot. She was subsequently beheaded at Fotheringay Castle in 1588. If it is thought that the citation of that triumph of English justice would persuade me of the merits of this legislation, I am afraid that is mistaken.
	This issue has been debated many times in your Lordships House over a number of years. While I am new to the public debate, I am not new to the argument, which I followed for some time while I was in Government. While others who have had experience and responsibility in this area have spoken publicly, so far I have kept my own counsel. I want today to set out why I think that the position adopted by the Government is correct and why I believe that it would be premature at this stage to lift the ban on the use of intercept evidence in court.
	When I was first called on to consider this matter in detail in 2001 or 2002, my instinctive reaction was that anything that assisted in the prosecution of serious crime and of terrorist offences was greatly to be welcomed. That remains my instinctive reaction. If we can devise a system that would meet the legitimate concerns of those in the intelligence community who have expressed their views and meet the considerable burden on the criminal justice system, I would welcome that. However, at present we are right to be sceptical, and we are right to accept the Government's position.
	In the first place, doubts were expressed about the number of occasions when intercept evidence would be useful in bringing prosecutions. I was aware of the review being undertaken in Government, which was reported in January 2005. It was referred to in the Minister's speech last week and today by the noble and learned Lord, Lord Lloyd of Berwick. It concluded that there would be modest increase in the conviction rate of some lower- and medium-level criminals, but not terrorists. When I left office, I was not aware of any change in that situation, although, to be fair, I had not checked that in the month before I left office. However, any change would clearly be a material factor.
	The report also pointed out associated serious risks to the effectiveness of the agencies and the development of new technology which would cause a fresh difficulty. I could find no fault with the conclusions of that review. In fairness, I was informed of Sir Ken Macdonald's work in support of his publicly stated view that intercept evidence should be admissible in court. On two occasions, I was promised sight of that work, but I never saw it, so I am not aware of the evidence that has been reported to us today in the speech of the noble and learned Lord, Lord Lloyd. The benchmark must be the comprehensive review that took account of all of the factors from all parts of government and the law enforcement and security agencies.
	I draw some support from the conclusions of the report, cited in Committee on the Serious Crime Bill, as to the effectiveness of the use of intercept evidence in other jurisdictions. The noble and learned Lord, Lord Lloyd, referred to them today. At that stage, the noble Baroness, Lady Scotland, said that Australia's latest figures on interception,
	"show that in 2003-04 there were no convictions in the five terrorism trials which used intercept evidence. The Canadian 2004 Annual Report on the Use of Electronic Surveillance shows that there were 84 interception authorisations in that year but that none ended with a conviction. In the United States ... 1,710 law enforcement interceptions ... resulted in 634 convictions".—[Official Report, 7/3/07; col. 310.]
	The evidence is that there may very well be benefits in allowing intercept evidence, but they would be modest. Many will say that that is sufficient—that modest increases in the conviction rate of serious criminals and terrorists is greatly to be welcomed; but that ignores the other difficulties.
	I am particularly concerned at the effect on the resources of the intelligence, law enforcement, prosecution and criminal justice systems generally. An intercept may and often does run for a considerable time. As I understand it, once used for intelligence purposes, the product is not retained or further analysed. We would now be imposing a burden of retention and analysis not for intelligence purposes, but for evidential purposes—which is very different. In doing so, the analysis will have to decide whether there might be within the product material that might, if it were released, be contrary to the public interest—for example, putting at risk the life or safety of an intelligence officer or participating informer. Get that wrong and the consequences can be fatal.
	Sir Swinton Thomas noted in his report at page 11, subparagraph iv that there was a burden of interpretation and translation. Translation is an obvious problem. It is already placing a huge burden on the system. Interpretation is different. We will no doubt hear from others about the difficulties encountered about what is said and when that is said—perhaps in code or some other method that is designed to throw off any possible eavesdropper. That requires real expertise and the disclosure of that expertise may in itself be damaging to the public interest.
	That job cannot be done by anyone other than intelligence officers. At a time when Britain is facing a huge threat from international terrorism and with our security services under great pressure, I for one would prefer to see our intelligence officers acting as intelligence officers rather than as disclosure officers.
	Then there is the problem of placing the material before the court and, if necessary, disclosing it to the defence. I am of course aware of the strictures on judges—the noble and learned Lord referred to the case of R v H—relating to the way in which they should approach the matter to limit the disclosure and the consequent burden to that which is strictly necessary. The role of the judge in our system is not to protect the Security Service or to minimise cost or inconvenience; the role of the judge is to secure a fair trial. We want nothing less and will accept nothing less.

Lord Boyd of Duncansby: My Lords, the noble Lord raises an interesting point. If there is exculpatory material, that is important. He will no doubt draw in his speech on the system in other countries, where, I understand, there is a strict division between intelligence material and evidential material. Does he expect intelligence material to be analysed with that in mind? If the material involves a statement in the person's own favour, there are limitations, at least in Scotland, on the introduction of that material; it would be introduced only if it were supportive of the reliability and credibility of that witness.
	We should not be surprised when we find a judge ordering the transcription and disclosure of 16,000 hours of the product of electronic surveillance at a cost of £1.9 million. Again, we find reference to that in Sir Swinton Thomas's report. That would clearly impose a huge burden on our services.
	I have some knowledge of the case in Canada against those accused of responsibility for the Air India bombing over the Atlantic in 1986. The trial concluded in Vancouver last year. In discussing the case with the Canadians, I was made aware that there was a large quantity of intercept material. Dealing with it, transcribing it and disclosing it placed a huge burden on them. The case was adjourned for considerable periods before coming to trial so that the defence could prepare—that includes preparation of that material. I forget how many hundreds of hours were involved but it was a very large number. That trial ended in the acquittal of those accused.
	These burdens on intelligence, law enforcement, prosecution and the criminal justice process are real and not imaginary. They force us to face the real issue of where best to put scarce and limited resources at a time when all parts of the system are under enormous pressure and the threat to the security of this country from international terrorism is real and not imaginary. It is not simply a question of increasing the amount of resources; it is a question of increasing the capacity of our intelligence services, prosecution and others, and of getting in expertise to do that. As I said earlier, I should prefer it if our intelligence services dealt with the prevention of serious crime. When the potential benefits are modest, we should be very cautious about adding to the burden on the system and potentially undermining the effectiveness of our intelligence services. Others more knowledgeable than me will no doubt speak at greater length from the intelligence perspective. But I have learnt that very often it is not simply a question of one piece of information being damaging; it is the cumulative effective of various pieces of information, disclosed at various times, that may, in the hands of the wrong person, be damaging to the criminal justice system and to our intelligence services.
	I accept that it is possible to create a PII regime that will, so far as possible in the criminal justice process, go a long way to protect sensitive material. It is not, however, without its difficulties, given that the primary goal of the process must be to secure a fair trial. As I said, it cannot deal with the cumulative effect, and a balancing exercise sometimes poses real problems when the primary goal is a fair trial. Once before a judge, there is often pressure to disclose more to give just that further inch in order to comply with the reasons for a fair trial.
	In the debate on 7 March in relation to dealing with secrets, the noble Lord, Lord Thomas of Gresford, said that,
	"if someone says, 'This is secret, you're being told this in secret', he has a certain power over everybody else. It is a secret that he does not want to tell anybody; he is holding it to his bosom and will not disclose it.
	Frequently, a court will go in camera and one hears evidence that the public would not generally hear. My experience is that people involved n the security services and in this sort of work are very proud of the fact that they know things that other people do not know. Their whole purpose in life is to know things that other people do not know. I often wonder whether that is the reason why there is such reluctance to divulge it. The usual suspects in your Lordships' House are not here tonight to put the other side of the case. We all know who they are".—[Official Report, 7/3/07; col. 304.]
	No doubt we will hear from them in due course. But I say to the noble and learned Lord in all seriousness that it is very easy to poke fun at the security services; I have done it myself. However, I think we all know that, if it were not for their activities, very many more people in our country would have been killed, maimed or injured over the past few years, and, in my submission, their views demand respect.
	I am very sorry that on this occasion I shall not be supporting the Bill of the noble and learned Lord, Lord Lloyd. I acknowledge the great contribution that he makes to the work of this House and also his tenacity in pursuing this issue. I hope that one day I can, with a clear and good conscience, support him but, for the moment, I think that the Government have it right.

Baroness Park of Monmouth: My Lords, the noble and learned Lord, Lord Lloyd of Berwick, knows how much I admire him for his splendid work in relation to the Gulf War veterans. I bow very sincerely to his tenacity, determination and brilliance. I have to respect the fact that we see those qualities again today, although, unfortunately on this occasion, I am not entirely at one with him, as he will know.
	When considering the Security Service Bill in 1996, the noble Lord, Lord McIntosh of Haringey, proposed an amendment to insert a new clause laying down the rule that,
	"the means of investigation must be proportionate to the gravity of the threat".
	I opposed his amendment as a whole but I agree with that provision, as I agreed with the Government's position that, where techniques were involved that required serious intrusion into the privacy of members of the public, the rules were already sufficiently robust. Among them is oversight by a commissioner. That is still true today, and the right honourable Sir Swinton Thomas, the Interception of Communications Commissioner, reports regularly. He has been quoted many times today and on earlier occasions.
	Noble Lords will know that even the Intelligence and Security Committee has no access to the confidential annexes to the reports of either Sir Swinton Thomas or the noble Lord, Lord Carlile of Berriew, to the Intelligence Services Commissioner. That, in itself, to my mind makes it deeply inappropriate to consider, as the noble and learned Lord wishes us to do, making records of such highly secret intercepts available, however truncated and disguised, in a court of law. It is worth remembering that Article 8(2) of the European Convention on Human Rights, cited in the commissioner's report of 2004, justified such interception in the interests of national security and the protection of the rights and freedoms of others.
	When the noble and learned Lord last brought his Bill forward, I argued that we must also consider the human rights of live agents playing a critical part in securing access to highly sophisticated communications, and the rights of the innocent public under threat from a presumed terrorist organisation. The noble Lord, Lord Thomas of Gresford, is likely to take me up on that issue, as he did last time; it is nevertheless relevant.
	The Privy Councillor Review Committee recognises that:
	"It is important that making intelligence available for prosecution does not compromise the collection and use of intercepted communications for intelligence services".
	In 2004, Sir Swinton Thomas reported that the Birkett Committee felt strongly that it would be wrong even to disclose figures on the extent of intercept because:
	"It would greatly aid the operation of agencies hostile to the state if they were able to estimate even approximately the extent of the interceptions of communications for security purposes".
	Although my own, strongly held, concern is largely for the live agent whose reports and activities in this field may enable the target to identify him, we must be quite as concerned about the danger of compromise of intelligence methods used to intercept communications. I am not talking about straightforward telephone taps: the material used in some courts abroad and based on police taps. The Minister has recently made the distinction between data-related interception and communications data. The world of encryption is becoming daily more sophisticated. Even during our debate in 2005, the noble Earl, Lord Erroll, made the point, speaking of the IT world, that it would be technically possible for an interception to be identified and recognised by the target. That very revelation, he said, would alert the targets to what was going on. Very small clues, given the extreme sophistication of some terrorist groups, will ring alarm bells and help them to identify either a live source or an encryption clue.
	Through the agencies, working with law enforcement officers and with the invaluable help of the communications service providers, the Government are able to penetrate enemy communications and, by identifying one technique, gain access to several networks. The targets feel safe. As the noble Baroness, Lady Scotland of Asthal, said on 7 March, when it is a case of planting microphones—and it is the output of those operations which some other countries use in court—the investigative agency chooses the medium. With interception it is the criminal, and the crucial distinction is that the criminal believes he is safe, so he continues to provide intelligence on his intentions and preparations. That is why it is crucial he should never become aware of the degree to which he is vulnerable to penetration, even in the very sophisticated IT world in which he operates today.
	Many targets are capable of developing highly successful counter-interception measures. With the amazing expansion of sophisticated technology in this new communications world, it is all the more vital that we should retain the initiative, continue to develop our knowledge of new techniques and always stay one step ahead. We know from a recent trial, for instance, that the defendant had successfully concealed a series of files and records pertinent to his réseau beneath several layers of encrypted material, hidden like Russian dolls within a computer. It is worth remembering that the police, with such knowledge, are able to identify sleepers as other members of réseaux and observe them, even if they cannot bring them to court. Thus the less our targets are aware of the degree of access our services have to ever more sophisticated methods of communication in this age of IT, the better the chances of defending the realm. The introduction of new technologies will raise by several notches the protections required to protect interception techniques and capabilities in the future.
	I have a further and very real concern, and it is not only for the live agent whose access here or overseas procures the clues to how a sophisticated international or domestic communications network operates, what technology it obtains and so forth. That agent often represents years of investment—linguistic, technological, and professional—and that is true of those who handle the material. He lives a dangerous life as he attempts to infiltrate and be accepted by a very closed ring, and he knows it. We do not have the right to put him at risk, and if we do, and he is lost—either dead or discredited so far as a target is concerned—the whole process of selection, training and infiltration has to begin again, and it can take years.
	We should not forget that, given the increasing number of identified suspects who may prove to have large quantities of material requiring urgent and accurate decryption, there are relatively few sufficiently highly trained and skilled people available to do that work, whether as linguists or technological experts or as men and women able to understand the working of the target's mind. All this is a far cry from wartime experience when the instructor who had trained an agent in wireless telegraphy could and did recognise the agent's signature, habits and methods of sending and could tell when it was the Gestapo, not the agent on the line; that is, whether the agent was under control. Nevertheless, I suspect that cryptographers and transcribers today develop a not-dissimilar feel for the target, and we should do nothing to put that valuable access to the minds of targets and the threat they pose to our way of life at risk by showing our hand.
	In short, I can only reiterate the view I have expressed in earlier debates on this subject: we should do nothing to endanger our capacity to penetrate increasingly sophisticated communication networks through blowing the agent or making the target aware of our capacity to decrypt his communications. The man who should know, Sir Swinton Thomas, is in no doubt about the risk posed to our security. We should not disregard his view or those of others who should know: the noble Baronesses, Lady Ramsay and Lady Taylor, the noble Lord, Lord Robertson of Port Ellen, and, not least, the Minister. I found the statement she made during the debate on the Serious Crime Bill on 7 March compelling. She told the Committee that Home Office work on the impact of new technology in communications and their interception was going on. She said:
	"The priority must be to ensure that we maintain our interception capabilities in the face of this change".—[Official Report, 7/3/07; col. 311.]
	There is no time to move to the use of intercepts in a court of law, whatever the safeguards, especially in the face of the resistance and anxiety of all the experts. Should the noble and learned Lord nevertheless succeed in securing the agreement of this House to a re-examination of policy, I must record my continued opposition to a Select Committee. There is already a cadre of parliamentarians who are cleared for access to delicate intelligence and security material: the Intelligence and Security Committee. They are privy to all the issues and are best placed to understand the risks. We should not forget Sir Swinton Thomas's dictum that,
	"interception has played a vital part in the battle against terrorism ... and one which would not have been achieved by other means".

Lord Dear: My Lords, I support the Bill. However, I have some sympathy for and understanding of the stance that has been taken for several years by the security services and those who advise them. I congratulate the noble and learned Lord, Lord Lloyd of Berwick, on introducing this short and economically written Bill. If it were enacted, it would punch well above its weight in the field of law enforcement. The Bill is so small in compass that I feel I am dancing on a pinhead because the issues, although weighty, are relatively easy to determine. However, I shall try. I shall not repeat in detail the wealth of examples that were given by the noble and learned Lord, Lord Lloyd, in his introduction.
	Section 17 of the Regulation of Investigatory Powers Act 2000 protects police and security services surveillance activities from disclosure. In effect, it provides an impenetrable shield behind which some highly sophisticated techniques can flourish. However, as we have heard, it can also result in some serious crimes and terrorist offences going unprosecuted when evidence of intercepted communications is not adduced. That can lead not only to convictions not following in those cases but result in some suspected terrorists being released without charge or made subject to control orders, detention and so on.
	The noble and learned Lord, Lord Lloyd, touched on the support for the change. It is worth labouring that point a little. The list is long and weighty—in my opinion it is a very heavyweight list. In no order of priority it lists the Commissioner of Police of the Metropolis, his counter-terrorist co-ordinator, pretty well the whole of the Association of Chief Police Officers—ACPO—the Attorney-General, the noble Lord, Lord Carlile, obviously the noble and learned Lord, Lord Lloyd, the present Director of Public Prosecutions and his immediate past predecessor, the Bar Council, the Law Society, the Human Rights Centre at the University of Essex, and, even closer to home, the Joint Committee on Human Rights in the Palace of Westminster—and, for what it is worth, I have supported this for the past 10 years or so with growing conviction.
	The opposition comes from one branch of the security services and those who support it. It is, understandably perhaps, very sensitive to the risk of exposing techniques—very highly sophisticated techniques that go way beyond telephone communication—to criminals and terrorists, either directly or through inadvertent leaks. Its fear, which I recognise, is that public interest immunity is not sufficiently robust or predictable to give it the necessary guarantee if a case is taken to court that relies on the use of that evidence.
	My sympathy for the opposition comes from my experience not exactly on these grounds, but of a parallel example in the late 1980s and early 1990s when I was at the forefront in many ways in using police officers—and watching in parallel the use of customs officers—in undercover operations against serious criminals. We developed those techniques as we went along. Some of the techniques for constructing false identities for operatives or for penetrating criminal organisations were things we wanted to keep to ourselves as not only would disclosure compromise the case in hand but it would also risk the physical safety of other operators in other ongoing investigations. The defence understandably would resist very strongly applications for PII. It would go on fishing expeditions, and often we found ourselves withdrawing prosecutions altogether rather than expose the sources and the techniques we were using. That is not altogether dissimilar from what we see today, although the magnitude of what we are discussing puts it in a very much higher league.
	As we have heard, other countries have been very successful. I think that we are the only common law country in the world that continues to exclude this evidence in the way we are describing. Those countries include Holland, Austria, Italy and Belgium, and there are others. I repeat: I recognise the extreme sophistication of the techniques that once disclosed would almost certainly in some instances render their use near useless in the future. We have the protection not only of disclosure of material where it is not in the public interest—the Criminal Procedure and Investigations Act 1996 comes to mind—but also now the Bill would suggest additional safeguards. They are found in Clauses 1 and 2. On my reading, those clauses would preclude fishing expeditions by the defence and no evidence of interception could be adduced until the judge had agreed to a prosecution application. So I am sensitive and sympathetic to the security services.
	I take heed of the overwhelming pressure for change. It is a change that I have said is long overdue. I disagree with the noble and learned Lord, Lord Boyd, when he said that the gains would be modest. On occasion, I think that they could be quite considerable. I would like the Bill to be debated in detail in Committee. I believe that we can produce something that would be watertight for the security services. That would be a considerable step forward in combating serious threats to both our national security and our national tranquillity.

Baroness Ramsay of Cartvale: My Lords, this Bill is much the same as the one that the noble and learned Lord, Lord Lloyd of Berwick, presented to us in 2005. In addition to that Bill, he has tabled many amendments to Home Office Bills, the last of which was debated on Wednesday, 7 March. They are all dedicated to the same end: to have intercept material used in court as evidence. It is not surprising, therefore, that one has more than a passing sense of déjà-vu in this debate.
	I have seen reports of the evidence given last Monday to which the noble and learned Lord referred. He will not be surprised to hear that I do not agree with him that the argument went "overwhelmingly"—as I think he said—against Sir Swinton Thomas and in favour of Sir Ken Macdonald. As the subject has been before us so many times, I make no apology for having to repeat most of the arguments against the Bill that I have made before. They are as valid now as they were on all the other occasions on which I have made them. I agree with the points made by the noble Baroness, Lady Park, and my noble and learned friend Lord Boyd.
	The demand for the use of intercept material in British courts to a large extent arises from, at best, a very imperfect picture of what interception entails and its scope; what its use in a British court would reveal; and the loss of intelligence capability and productivity that would ensue. In the words of the former interception commissioner, Sir Swinton Thomas, in his report printed in February 2007:
	"Various, in my view sometimes misguided, and often ill-informed, though no doubt well-motivated people continue to re-open this complex question ... Amongst those who advocate changes are some lawyers, indeed, some distinguished lawyers ... Those who advocate a change in the present law would be wise to discuss the issue with those who are knowledgeable on this subject. They do, after all, know what they are talking about".
	Interception is much wider and more complex than most people could imagine; happily, that includes the targets of intercept operations. Transcripts often show people assuming, wrongly, that they are secure in whatever manner they are communicating. The slightest hint of interception risks revealing the techniques involved on that particular target and similar targets will be immediately assumed vulnerable. The loss of access is instant and usually permanent. That is even more true if the material is encoded or encrypted, where often very sensitive technical means and/or human agents are involved. It is often said, as the noble and learned Lord did again today, that other countries use intercept evidence in court, so why cannot we? There are many reasons, but today I shall try to explain just three of them.
	First, we can rightly be very proud of British sophistication and extensive expertise in the field of interception and transcription, but its very sophistication and achievements render it extremely vulnerable. As I have said before, a straightforward telephone tap on home national territory would have very little to lose in revealing techniques or sensitive services. It is that kind of material that other countries use in court. In some countries, it is the only kind of intercept they produce. In others, where more sophisticated techniques are employed by agencies other than law enforcement agencies, it is the more routine product of the law enforcement agencies' warrants that is produced in court. When one is discussing this in the United States or Australia, as I have done, it is vital to know what kind of intercept, warrant and agency is involved and is being discussed and from where the statistics are produced.
	Secondly—I choose my words deliberately—there is a uniquely close, interwoven relationship between our intelligence and security services and our law enforcement agencies. That, and our warrantry system, makes it much more difficult to disentangle the various contributions to an interception operation. I shall not expand on that, but it is a real difficulty of enormous complexity.
	Thirdly, our adversarial legal system, in which the defence counsel can range widely at the discretion of the judge, produces in the case of intercept material an unacceptable risk of exposure. Public interest immunity, with which I am familiar, is not a complete solution to this for various reasons, some of which were enumerated by my noble and learned friend Lord Boyd. It would also impose the crippling burden of transcribing and preserving an enormous amount of related intercept material. According to press accounts of the very recent Adams trial, transcription of the eavesdropping material at the request of the defence is reported to have cost £1.9 million—it is not reported how many hours had to be spent to produce that—and shows what is involved. Because of the sheer volume of the material that would have to be processed, there would be a serious diminution of product from the services concerned—all at a time when wider and greater sweeps of coverage are needed in the kind of targeting required in counter-terrorism work.
	Intercept as a valuable intelligence tool does not have to be processed and preserved as potential evidence would in court. I should say in parenthesis that there is a misconception among those who do not have much professional experience of handling intercept material that it would be widely useful as evidence. In fact, it is not. It is a valuable intelligence tool with which one can make judgments and assessments and take action, but it is rarely of evidential use. Even less is it a magic bullet. I should add that countries whose legal systems have investigating judges or magistrates can handle sensitive material without the risks involved in using it in a British court.
	A further point of difference between us and countries that are often quoted as using intercept in court is that our telecommunication companies have no statutory obligation to facilitate interception by our intelligence and security services, which obviously adds to the concern about sensitivity in revealing operations. It is not simply a question of protecting the safety of their staff as witnesses—a point that was made in the debate on Wednesday 7 March. As a general point, I have never heard anyone say that using intercept material as evidence is wrong in principle. It is a question of practicality and the effect of such a move on the efficiency and productivity of the agencies involved. Talented legal minds all over Whitehall have wrestled with this issue over a long period and under different Governments. It may be that with technological developments such as voice over internet protocol, there may have to be new legislation, but whether that will make it possible or, what seems much more likely to me, impossible for intercept material to be used as evidence cannot at this moment, I think, be completely clear.
	In his report, published in February 2007, Sir Swinton Thomas says of the problems with the criminal process:
	"These problems are going to increase in the future because of the huge changes taking place in telecommunications technology as Communications Service Providers ... change to internet protocol networks. There is a real danger of criminal trials being aborted. I know that work has been done in an attempt to surmount these problems and the problems relating to the European Community and Human Rights law, but I have not seen any system proposed which would successfully overcome these problems. The problems are very great and should not be underestimated".
	Sir Swinton Thomas, a distinguished legal figure, was interception commissioner from April 2000 until March 2006. In his last report, he sets out at some length in Section 17, which I commend to your Lordships in its entirety, his views on the admission of intercept material in criminal proceedings. He repeats his conclusion from his previous report:
	"I concluded by saying that I had no doubt that the balance of argument fell firmly against any change in the law, and that any change in the law, would, overall, be damaging to the work of the security, intelligence and law enforcement agencies ... I am still of that view, and it has been reinforced, and strengthened, by the events surrounding the London bombings and attempted bombings of 7th and 21st July 2005, and other terrorist enterprises, in respect of which I have had the opportunity and considerable advantage of seeing much material and having discussions with those involved".
	As of today, I am sure—speaking from a background of considerable professional experience in this field—that if a balance sheet is drawn up of the gains from using intercept as evidence against a list of the losses in productivity, efficiency and security of sources, the only possible conclusion would be that the losses far outweigh the gains. Sir Swinton Thomas concludes:
	"In conclusion, in my judgment, the introduction of intercept material in the criminal process in this country (other countries have different systems) would put at risk the effectiveness of the agencies on whom we rely in the fight against terrorists and serious criminals, might well result in less convictions and more acquittals and, most important of all, the ability of the intelligence and law enforcement agencies to detect and disrupt terrorism and serious crime and so protect the public of the country would be severely handicapped".
	I agree entirely with that and I rest my case, I am afraid, against this Bill.

Lord Desai: My Lords, I hesitate to speak on this Bill. I am not a lawyer, a policeman, a Minister or even an ex-Minister, and I have not worked in the security services. I have been on the fringes of listening to this debate as the noble and learned Lord has again and again put his case for intercept evidence to be allowed in courts. I speak now only because, as an ordinary citizen who takes an interest in terrorism, I think that a benefit-cost balance must be struck. In March 2005, I said in the debate on the Terrorism Bill that, on the one hand, we had to protect against the probability of an innocent person being incarcerated, but, on the other hand, we had to minimise the probability of a likely terrorist escaping.
	Last August and this February the police swept in on people, made lots of arrests and detained some for many days. My impression is that very few cases are brought to court, although I may be wrong. Most of those people are Muslim men and women. When the police arrest people, hold them and then have no case against them, the Muslim community has a clear impression that this is pure and simple harassment, although I do not know whether it is. If there is any possibility that some people who are not at present convicted could be convicted with the use of intercept evidence, the balance of profit and loss has to be struck anew.
	On the one hand, we are told that intercept is immensely valuable evidence gathered by skilled people and that lives are at stake, but it is like a nuclear weapon: it is very powerful but it cannot be used. On the other hand, we are told by the noble Baroness, Lady Ramsay, whom I respect very much, that this material is of little evidential use. It is not a magic bullet and therefore it does not really matter. I am genuinely puzzled.
	I came across a pamphlet published by Democratic Audit in which I read something which struck me, at least, as true,
	"the refusal to allow this evidence to be used in court means that some serious criminals go free, and that some terrorist suspects are or will be detained without charge. A 'shadow' system of criminal justice, by which terrorist suspects are detained without trial by special courts, has been created which subverts the basic principles of British justice and violates human rights. This process arguably contributes to the essential argument of the extremist elements within the British Muslim communities that the United Kingdom persecutes Muslim people at home and abroad".
	I know that this impression exists because I come across it again and again. I only want to say that, if we change the balance of probabilities and perhaps bring more people to court, the courts could then decide whether to convict them. By doing that, at least we may save lives that would otherwise be lost.

Baroness Taylor of Bolton: My Lords, I wish to intervene only briefly so I shall not be tempted to comment on all the points made by my noble friend Lord Desai, but I would point out to him that, whenever there has been a problem with the kind of arrests he mentioned, there is a great deal of publicity, but when our intelligence and security agencies are successful, very often and for good reason we never hear about the disruption of threats to our society because those things cannot be publicised. I hope that my noble friend will take those factors into account in his cost-benefit analysis.
	I join colleagues in congratulating the noble and learned Lord, Lord Lloyd, on yet again securing a slot for a debate of this kind. One of the first debates in this House in which I participated was on this issue. The noble and learned Lord is either very fortunate or very clever in having managed to raise this issue so often. It is an important issue and one that we have to discuss carefully from time to time, but I am afraid that I am not yet convinced by his arguments, strong though they are. He anticipated that those of us who take part in these debates would ask the very simple question: what has happened since the last time to make us change our minds? I do not agree that anything of significance has happened, including the information that was used so well by my noble friend Lady Ramsay about the exchanges last week. A substantial case has been made against going down this track.
	However, I think we all agree with the noble and learned Lord, Lord Lloyd, on one point. In principle, no one, I think, has any objection to the use of evidence of any kind in court that helps to secure the conviction of criminals, such as terrorists and anyone against whom we need to take action. The noble and learned Lord quoted several people, but we can all see the record showing that the Prime Minister, the Home Secretary and many others have said that they would like to go down this route if it is ever possible to do so. If anything would secure more convictions, we would all want to help in achieving that, but we ought to take on board what the noble and learned Lord, Lord, Lord Boyd, said about the situation in Australia, and particularly in Canada, where the use of intercept evidence has not helped in any clear way in the fight against terrorism.
	I have said that the Prime Minister, the Home Secretary and others have made clear their starting point: that in principle they would like to use intercept as evidence. Ministers have taken large steps in trying to make that possible. We have had many inquiries and what are called the "best brains in Whitehall" looking at this dilemma. There has been a presumption by Ministers that, if it is possible to use this evidence safely, that is what we should do, hence the many inquiries, papers and committees on the subject. It is significant that none of them, despite that basic presumption in favour of going down this path, has been able to come up with a formula that would safeguard the interests of all us and the agencies.
	Why can they not come up with such a formula? I do not believe that it is because of some petulant or short-sighted resistance on the part of the agencies or anyone else. I think it is because none of the inquiries has been able to come up with watertight solutions to the practical problems faced. Any solutions have to be watertight, because the cost of this going wrong could be devastating, restricting the abilities of our intelligence and security agencies to do the work that protects every single one of us.
	I do not want to repeat the arguments that my noble friend Lady Ramsay or the noble Baroness, Lady Park, have made, but they should be listened to carefully and be given considerable thought. I shall mention three concerns I have about the practical consequences of moving in this direction. These have been touched on, so I shall be brief.
	The first concerns the disclosure of the capabilities of the agencies themselves, and the extent to which the use of intercept evidence could reveal information about the techniques that those agencies use. We have probably all seen in films and heard from trials that criminals have over the years learnt that they should use mobile phones rather than fixed lines; we know that they are now using throwaway phones, and that they work out how long they can keep those phones before they can be monitored—and that is only at the simple end of the criminal spectrum. At the other end—the end that includes very sophisticated criminals, be they drug barons, money launderers or indeed terrorists—the problem our agencies often have is keeping one step ahead of the criminals so far as technology is concerned.
	The noble and learned Lord, Lord Lloyd, talked about his interesting conversation over the internet and pointed out that there were about 150 companies working out how to intercept that kind of communication. Not all the companies that are doing that can be watertight, and none of the information they get about resistance or hacking would stay with the ones that are not.
	The noble Lord, Lord Dear, talked about inadvertent leaks from information that becomes available in court, but the problem is bigger than that. We have to guard against anything that could help criminal or terrorist elements complete the jigsaw about how certain information could be obtained. They are trying to take pieces of information from lots of different areas, and the growing counter-interception business is probably for their benefit as well as others', so the agencies' main task here is keeping ahead of the game. Anything that undermined that could have very serious consequences.
	My second concern is about the methodology of our agencies. Our security and intelligence agencies are not police bodies. We do not have an FBI or the equivalent of many other similar organisations around the world. They do not work on the basis of the evidential rules required for the police or for court hearings. Some Members might say that such evidence as intercept would be used in court only in a minority of cases, but when the agencies are starting out on an investigation how do they know that this is the one case where they have to tick all the evidential boxes? And if one lead in an investigation results in a case going off at a totally unexpected tangent, the evidential hurdles may not be cleared because of their not being relevant to the original case. We have to be realistic and understand the strain that such requirements could put on our intelligence agencies.
	My third concern is about court procedures. We have been told again today that certain safeguards could be introduced if we allowed the use of intercept as evidence in court. We could, for example, restrict full disclosure to the defence, although I see that that was questioned earlier today. Maybe I am too cynical, but I wonder how such procedures would stand the tests of the challenges that we see so often in our courts on grounds of human rights. In that respect, I share the concerns of my noble friend Lady Ramsay about the limitations and, indeed, unpredictability, of the public immunity approach on which we have been asked to rely.
	I do not think that we should resist this issue simply because the intelligence and security agencies advise us to do so. Of course they should be challenged and questioned, and, through Ministers, I know that this happens. We have a problem, however; the only people who can ask the right questions and get the full answers are those operating within the ring of secrecy. Those of us outside it cannot question in a direct way and get all the information. That is why I believe that, if any further progress is to be made, it can only be with the help of the Intelligence and Security Committee. Rather than have a Bill of this kind go into Committee in this House, with all the restrictions about the information that could be available because of its sensitive nature, using the Intelligence and Security Committee and having confidence in it would be the way forward if—I do not think that we are there yet—we reached a stage where we thought we could accept all the safeguards being put in place and could move in that direction. The will is there; people want to move in that direction, but the hurdles and safeguards that need to be introduced are significant. For that reason, I cannot support the Bill.

Lord Thomas of Gresford: My Lords, this is a very short Bill on a very important subject. As the noble Baroness, Lady Taylor of Bolton, said, we have been down this track many times; indeed, one might say that the noble and learned Lord, Lord Lloyd, has kept right on to the end of the road and he is to be congratulated on it. I know that the way has been weary, but he still carries on.
	I was glad to hear from the noble and learned Lord, Lord Boyd, who is unfortunately not in his place, and to welcome him to the debate. It is unfortunate that there was a lack of communication between him and the DPP. He told us that he was unable to obtain from the DPP's office the evidence on which the DPP had formed his view. Similarly, he took a directly opposite view from that expressed by the noble and learned Lord the Attorney-General—who for the second time today I am sorry not to see in his place, so that I could share with him his support for the principles behind the Bill.
	I suppose that I should welcome the noble and learned Lord, Lord Boyd, to the distinguished band of those who, with some temerity, I called "the usual suspects" on 7 March. I am glad that we have had their participation today in a debate on a matter which we have so frequently discussed together.
	On the use of intercept evidence, the Government, in their reply to the 24th report from the Joint Committee on Human Rights, said:
	"There is ongoing work to re-examine the case for, and the likely benefits of, using intercept as evidence to secure more convictions, primarily against organised criminals and terrorists, particularly those liable to removal from the United Kingdom".
	The response went on to say that the Government,
	"concluded that was not the right time to change the law",
	and that there was,
	"a clear commitment to this work but also recognition of the need to protect our intercept capability. We are committed to find, if possible, a legal model that would provide the necessary safeguards to allow intercept to be used as evidence. In addition to the work on examining magistrates, we are looking at a PII (Public Interest Immunity) plus model. This work is due to report to Ministers in due course".
	That was last September but, so far, we have not heard of such a report or review. We look very much forward to it.
	Having listened so many times to the Government's response to this issue, I have come to the conclusion that the Government's basic objection is based on the Security Service's desire to avoid regulation. In every common-law country where intercept evidence is allowed, it is subject to control—usually, judicial control. Warrants have to be obtained from judges and give reasons why a particular type of intercept is sought. That is a system that is resisted in this country.
	I refer, too, to some of the objections and arguments that have been advanced, not least by the noble Baroness, Lady Scotland, on 7 March. First, are criminals and terrorists highly alert to the possibility that their phone calls and mail will be intercepted? Well, yes, of course they are—but that has not, in common experience, stopped them talking to each other. As was said earlier, that is very often the only way that they have of communicating. The assistant commissioner of the Metropolitan Police, Mr Andy Hayman, in evidence to the Home Affairs Committee in February 2006, said that this was a,
	"well and truly worn-out ... lightweight argument".
	Of course, it has no impact on the use in our courts of foreign intercepts.
	Those who have no experience, as I declare I have, of the use of the PII machinery, regard it with some suspicion. In January 1993, 14 years ago, I on behalf of the prosecution sought what must have been the very first public interest immunity hearing in a terrorist case. I say that it was the first because we waited a week for the decision of the Court of Appeal in a certain case to ensure that the machinery could be properly used. It has been used, both then and since, regularly to prevent disclosure of covert methods of surveillance and human intelligence sources. As the noble and learned Lord, Lord Lloyd, said, it has been supported in the European Court of Human Rights in the case of Rowe and Davis. The noble and learned Lord the Attorney-General has issued detailed guidance on how public interest immunity is to be sought and obtained. However, it involves disclosure to the judge of intercept evidence, and how it has been obtained, and it is for the judge to determine when PII applications are made what is the balance of public interest between disclosure and the use of the evidence. As far as I am aware, at no point in the 14 years that have elapsed has it ever appeared that sensitive material and methods used by the Security Service in terrorist cases and otherwise have been disclosed. So it is a tried and tested mechanism.
	It is said that the use of intercept evidence would cause a lack of co-operation between the police and the intelligence services. The noble Baroness, Lady Scotland, said:
	"It cannot be disputed that no other country in the world—none—enjoys the huge benefits which the United Kingdom derives from the close relationship, including in terms of interception, between law enforcement and the intelligence agencies and with the communications service providers. Yet there are those who still propose that we adopt the interception regimes used in other countries—consequently undermining or severing those relationships".—[Official Report, 7/3/07; col. 310.]
	What does "consequently" mean there? Why should it cause a severance of the relationship and lead to a lack of co-operation between the police and intelligence services? Perhaps that is a question that the noble Baroness may have time to address.
	It is also said that the use of intercept evidence will hamper our ability to adapt to changes in technology and that new forms of communication are coming forward. Those new forms of communication will affect intellectual property law, data protection and telecommunications in general and they may cause difficulties in intercepting calls between two people. But what has that to do with the admissibility in court of any product that is obtained from such calls? I fail to understand that. I can see that new technology may make it more difficult to get the product of telephone calls between criminals, but why should it not be admissible for that reason?

Lord Thomas of Gresford: My Lords, I am very grateful for that small chink of light into a rather dark quarter, but I do not understand it because that could be said of any telephone conversation. It is not necessary normally to prove in court by visual identification that X is on one telephone and Y ison another. It does happen occasionally when surveillance is used, but the context almost inevitably shows who the two people speaking are because they are talking about where they have been, what they have done and what they intend to do.
	Resources are given as a reason. That was a concern of the noble and learned Lord, Lord Boyd. Again, I refer to Mr Andy Hayman's evidence to the committee in which he said that,
	"you can be very selective about the things you are going to transcribe if you are very precise on your investigation and focused".
	We need to think about that. It is a question of being able to target what exactly is needed from the product of intercepts that have been carried out. I emphasise again that it is not a requirement to disclose material which neither helps the defence nor undermines the prosecution to the defence. A lot of talk goes on about adversarial proceedings and the bogey of the defence counsel who is able to cross-examine people into revealing their surveillance techniques, but that is just not the case.
	Adversarial proceedings are used in the United States, New Zealand, Canada and Australia. Very nearly the same principles of evidence in criminal procedure are used in those jurisdictions. There is no unacceptable risk of exposure merely by the adversarial system.
	Finally, the argument is that it will not tell you very much and it does not reveal very much. It certainly can reveal a great deal. I recall a case a year or two ago when something like £45 million-worth of heroin was imported into this country as cat litter. It was one tonne among about 180 tonnes of cat litter. In the telephone intercepts that were obtained abroad and used, no one ever referred to it as heroin. It was referred to as "stuff", but it was certainly quite clear what the conspirators were talking about. When they did not want the driver of the vehicle in which they were travelling to understand what they were saying, they spoke in Albanian. Intercept evidence was used in that case. Why? Because they had travelled abroad. In an English court, you have the ability to listen to or to read the transcribed conversations of conspirators if they are abroad and bugs have been placed in their car, but you cannot listen to what they might say to each other over the telephone in this country. There is really no good reason of principle behind that.
	Is it a question of legal regulation? Is it that the security services would not want to go to a judge to obtain a warrant for intercepts when they were required? They have to do that to use other surveillance techniques, such as bugging a car or bugging a flat. Do they simply not want to have to bother with all that, and justification for it, when it comes to telephone calls? The noble Baroness, Lady Ramsay, said that it is wider than that—wider than anyone can imagine. When she said that, I was reminded of what was said in the Canadian supreme court by a very highly respected judge, Mr Justice La Forest:
	"Electronic surveillance plays an indispensable role in the detection of sophisticated criminal enterprises. Its utility in the investigation of drug-related crimes, for example, has been proven time and again. But ... it is unacceptable in a free society that the agencies of the state be free to use this technology at their sole discretion".
	Consequently, in Canada it is necessary to obtain the consent of a judge before such evidence can be obtained.
	As I said at the beginning, this is a short Bill. I commend the noble and learned Lord, Lord Lloyd of Berwick, on pursuing this issue with such diligence. I assure him, as before, that we on these Benches will support him.

Lord Henley: My Lords, the noble Baroness, Lady Ramsay of Cartvale, referred to a feeling of déjà vu as this Bill came before the House. I am relatively new to the debate, but for me too there is a feeling of déjà vu: I think this is our third outing in five weeks. We discussed it at Second Reading of the Serious Crime Bill; we discussed it when the noble and learned Lord brought forward his amendment to that Bill in Committee, and we then listened to a very lengthy reply from the Minister. I do not know whether today she will want to give us the long answer or the short answer. This has been a very different debate in that the Minister has had considerably more support from the "usual suspects", as described by the noble Lord, Lord Thomas of Gresford, with his greater experience in these debates. I look forward to listening to the Minister's response.
	Since the noble and learned Lord introduced his Bill in 2005, there have been two major reports: Justice's well respected and weighty report, Intercept evidence: lifting the ban, which was much referred to in the previous debate, and the publication by Sir Swinton Thomas, the Interception of Communications Commissioner, of his most recent report on 19 February. The noble and learned Lord, Lord Lloyd of Berwick, has successfully destroyed the reasons for maintaining a ban on the use of intercept evidence in court. He has done that largely by asking: why are we not using such evidence? We have heard a number of responses, but they do not address the issue of whether there would be sufficient benefit in allowing that evidence to be used—and that is what the Minister must address.
	The noble Lord, Lord Dear, mentioned that the support from across the spectrum—including a large number of eminently qualified people in the police, in Parliament and elsewhere—for lifting the ban on intercept evidence is overwhelming. The noble and learned Lord mentioned today and last week a list of six of the most senior figures in those areas, including four of the most respected independent bodies that have collectively called for the lifting of the ban on intercept evidence being used in court.
	The noble Baroness will no doubt want to refer to the fact that we are one of the few countries left in the world to refuse the admittance of such evidence gathered on home soil. We know that the United States benefits in this context from its relationship with our Government. Not only do Her Majesty's Government approve the extradition of British citizens to America without corresponding rights of their own, but the US courts permit the use of evidence gathered in the United Kingdom, while courts in this country are forbidden to do so. However, as was mentioned by the noble Lord, Lord Thomas of Gresford, British courts are permitted to hear evidence gathered abroad.
	The value of evidence gathered abroad is not, per se, greater than evidence gathered in this country. Indeed, the noble and learned Lord's report in 1996 identified at least 20 cases in which the admissibility of evidence would have enabled a prosecution to be brought for serious offences. In support of the value of intercept evidence, the experience of France, as was highlighted in the noble and learned Lord's report, showed that 80 per cent of the evidence against those suspected of involvement in the 1995 bombing on the Paris Metro was derived from intercept evidence.
	The Minister refused to accept what the noble and learned Lord was suggesting last week in his amendment to the Serious Crime Bill—I have carefully read what she described as her "long answer", for which we are grateful—on the basis of preserving the safety of the communications industry and the secrecy of the intelligence agencies. Were it not for the central body of her speech, I would have been reassured by her words at either end. They are similar to her comments at Second Reading. She stated that:
	"Our position remains what it has always been. We see that this would be an advantage if it could be safely deployed ... The emphasis has always been on whether it is possible for it to be safely deployed".—[Official Report, 7/3/07; col. 308.]
	It was, therefore, a disappointment that so much of the rest of her speech did not address the serious and constructive possibility of public interest immunity, but instead she chose to provide a comparative explanation of intercept statistics world-wide.
	The noble Baroness's argument was that the use of intercept evidence could undermine the public interest by revealing to terrorists and organised criminals vital operational details deployed by the police and intelligence services. I have to say that that is nonsense, as the noble and learned Lord and others have made clear. A well established and refined system already operates in the criminal courts to ensure the withholding of operational details in circumstances in which disclosure would be detrimental to the public interest.
	Moreover, the Minister chose not to address the words of the Attorney-General, which were referred to by the noble Lord, Lord Thomas of Gresford. Five months or so ago, the Attorney-General said—his words were quoted in the Guardian by Clare Dyer, its legal editor—that:
	"I'm personally convinced we have to find a way of avoiding the difficulties ... I do believe there are ways we can do that"—
	he was going considerably further than the Minister did at Second Reading—
	"Otherwise we're depriving ourselves of a key tool to prosecute serious and organised crime and terrorism".
	I underline what the noble Lord, Lord Thomas, said; it might have been desirable if the noble and learned Lord the Attorney-General had been available to assist the Minister on the Bill this afternoon. We are reassured that he can see the merits of improving the quality of evidence in terrorism and serious crime trials.
	The Minister offered a second line of defence last week, stating that intercept evidence would not have been an effective substitute for control orders in the case of recent terrorist activity. Yet, so far as I can recall, the Minister was the only person who actually suggested such a straightforward substitution.
	I am reminded of the arguments put forward just over two years ago on precisely that matter under the then Serious Organised Crime and Police Bill. The central point to come out of that debate—in the shadow of the introduction of the mechanism of control orders just a few weeks later—was that, regardless of the tools that were used to tackle crime, justice must be implemented on the basic principle of the value of evidence; if it is relevant it is admissible. As one of my colleagues, Andrew Mitchell, said in another place back in February 2005,
	"inadmissibility ... is a carbuncle on the face of the law of evidence".—[Official Report, Commons, 7/2/05; col. 1233.]
	There is the possibility of double protection—of the principle of the admissibility of evidence and of the function of the public interest immunity. I therefore put it to the Minister that, as I said last week, it is time for the Government to justify what might be described as the poverty of their approach on this issue. She defended the Government's refusal to address it.
	I fully support the noble and learned Lord's Bill, as my party has done for a number of years. I am reminded of the intervention of the noble Lord, Lord Bassam, who wanted to know when we had changed our mind. As I pointed out to him, it is perfectly legitimate for us to change our mind, and change our mind on this subject we have. I look forward to the Minister's response and to the Bill's further stages. I trust that the noble and learned Lord, Lord Lloyd of Berwick, will wish to take it on to its Committee stage and through its remaining stages in this House.

Baroness Scotland of Asthal: My Lords, this is government policy. In the previous debate, we were talking about the Attorney-General's role when he gives legal advice as the most senior legal officer. I am sure that the noble Lord is clear about the distinction. I am sad if he finds it strange, but perhaps I give him greater credit than he gives himself.
	The Government's position is that the starting point is a legal model, which has to be fully ECHR-compatible, protect sensitive capabilities and material, take account of new technology and not damage operational capability; for example, by consuming disproportionate resources.
	The subject is not easy; it is complex, and it becomes more complex the closer one comes to understanding the issues involved. There is no consensus for changing the law to permit intercept evidence. The experience of the noble and learned Lord, Lord Lloyd, who was Interception of Communications Commissioner in the 1980s, is set against that of the outgoing Interception Commissioner, Sir Swinton Thomas, whose last two annual reports spoke eloquently of the risks involved in changing the law and came down strongly against it, as the noble Baroness, Lady Park, my noble friend Lady Ramsay and my noble and learned friend Lord Boyd made clear. It is also set against the agencies that have been helping us examine the issue, which support the Government's position and the importance of safeguards, including the interception and law enforcement agencies. But this is neither a headcount of how many support intercept evidence and how many do not, nor of how many big figures each side can wheel out to argue their case. The stakes are much higher than that. If it was a count, of course, we would win on this occasion.
	The difficulty is illustrated starkly by the fact that the subject has been under almost continual review for the past 13 years, a point made by my noble friend Lady Taylor. Successive efforts to devise ECHR-compatible legal models with the necessary safeguards to protect sensitive capabilities, techniques and relationships, and which would not put an undue administrative burden on the intercepting agencies, have all failed. It is not for a lack of will or want of trying that we have reached the current position.
	The last review in 2003-04, concluded that the benefits of changing the law to allow intercept evidence were outweighed by the risks of doing so, and that the impact of new technology needed to be properly considered and factored into the decision-making process. When my noble and learned friend Lord Boyd made that comment, he was therefore supported by the last review. The outcome of the review was given by the previous Home Secretary, my right honourable friend Charles Clarke, in a Written Statement on 26 January 2005.
	Although considerable time and energy have been devoted to this, our deliberations continue. We are currently considering two further legal models—an extended PII system involving closed sessions and an examining magistrates system—and when we come to a conclusion on them, we shall say what it is and why we have come to it. It is sometimes argued that if only we could produce intercept evidence against terrorists we would be able to lock more of them up and avoid measures such as control orders. That is simply untrue. The last review concluded that there would be, I emphasise, very limited utility against terrorists. That was made clear in the Written Statement and amplified recently by Sir Swinton Thomas's evidence.
	One implicit question is why successive models that we have considered have failed. One reason is that the more the prosecution seek to rely on intercept evidence, the greater the premium of being able allow the defence to probe it. The more robust the safeguards developed to protect sensitive material from disclosure, the less likely it is that the legal model is ECHR compliant. These are difficulties with which we simply must grapple if we are to have a successful system enabling us to use intercept in a way that we would deem proper within our structure.
	When I resisted the proposals of the noble and learned Lord, Lord Lloyd of Berwick, last week, I quoted a number of statistics to illustrate why the Government do not accept that other countries do better than we with their evidential use of intercept. The examples I used came from 2004. I am now able update them with the 2005 figures. These are not anecdotal figures from conversations with individuals who happen to have a view on how their system is working; they have been culled from the reports published on each jurisdiction and we must assume that the figures contained therein are correct. In Australia, no intercept material was offered, and therefore no convictions were made on the strength of intercept evidence, in any terrorist trial in 2004-05. That comes from the Telecommunications (Interception) Act 1979 report. In 2005, Canadian statistics—

Baroness Royall of Blaisdon: My Lords, I congratulate the noble Lord, Lord Beaumont, on once again bringing forward his Bill so far. He certainly shows tenacity and strength, and I know that that reflects a deep belief in this subject. This has been a short but interesting and, indeed, poetic debate. I am grateful to the noble Earl, Lord Howe, for his soothing quotations. I have a real sympathy with those who find piped music a trial and wish to see it regulated. I personally detest piped music, but I do not believe that it is a matter for regulation. We are all committed to reducing red tape, and regulatory activity should be proportionate to the risk involved. Our focus must be on the health and safety risks that cause greatest injury or ill health. Extending regulation into low-level risk areas would almost certainly attract much criticism and be suggestive of a nanny state. It would also add to the burdens on the NHS.
	However, I do not wish to underestimate the irritation that piped music obviously causes the noble Lord and many others, but irritation is not the same as harm and there is no convincing evidence to show that exposure to piped music causes significant harm to health in the great majority of people. When I talk about harm I think first of damage to hearing. Prolonged exposure to noise at 85 decibels over an average of eight hours can cause damage. The Control of Noise at Work Regulations cover just such instances. They contain a general requirement to control work noise to as low a level as is reasonably practicable. But at levels below 80 decibels there should not be a health and safety issue. It is highly unlikely that music or TV would reach those levels. Hospitals are noisy places. Research shows that a hospital ward can reach average noise levels of as much as 50 to 70 decibels, with peaks of up to 90 decibels. That is higher than the WHO recommendations, but it is not because of TVs or piped music; rather, it is due to medical equipment, telephones and people talking.
	The noble Lord has quoted research showing that blood pressure is raised in people who on two occasions have listened to piped music while giving blood. However, that very same study showed the opposite in patients who gave blood three times. Other studies have shown reductions in stress and even reduced pain from listening to soothing music. The research is conflicting. Search as one might, there is scant evidence of harm. In the absence of such evidence, it would be improper to seek to ban it.
	Can piped music or TV do any good in common areas in hospitals? Common sense alone would tell us that, in some circumstances, background entertainment can be beneficial, as the noble Lord, Lord Addington, suggested. We have seen a revolution in waiting times in A&E, with over 98 per cent of patients now seen and treated within four hours, but there are still times when a short wait is inevitable. During those periods, watching TV may be a useful distraction, and we should not prevent hospitals from using it.
	The noble Lord, Lord Addington, asked about guidance. We do not put out central guidance; however, as noble Lords will be aware, ward sisters and modern matrons have responsibility for ensuring that their departments offer a quality environment, which includes paying attention to unwanted noise. We should leave this to modern matrons and nurses themselves.
	Finally, the noble Lord proposed the compulsory wearing of headphones. Only a few years ago, it was commonplace to see groups of young people listening to music on their ghetto blasters. Today, the status symbol of choice is the ubiquitous iPod—with headphones. iPods have transformed the journey to and from work, and I have no doubt that they have helped many a patient in hospital while away the time as they move along their care journey. In fact, headphones are now the norm. Bedside TVs are usually equipped with them, hospital radios invariably so. Frankly, we do not need legislation to encourage people to use headphones. They are doing so already of their own free will. We should also remember that some people cannot wear headphones, perhaps because they suffer from tinnitus—although I note that the noble Lord suggested that people from tinnitus suffer from background music in any case.
	Piped music, acoustic wallpaper—they may well be an irritant for many people, and they may well be intrusive, but they are not a major problem that needs to be addressed by legislation. Do not take my word alone, though: in the past few weeks we have asked a representative sample of trust chief executives and senior managers for their views. Noble Lords will be relieved to learn that well over half the respondents—60 per cent, from a sample of 92 people—said they did not use piped music or general TV in the public areas of their hospitals. The remaining 40 per cent reported that it had not led to complaints. With regard to the compulsory wearing of headphones, 40 per cent felt that enforcement would cause problems, while 40 per cent felt that powers were already sufficient to deal with the issue. That suggests that it is, as the noble Earl, Lord Howe, indicated, a problem best resolved at local level, and that it is better for hospitals to listen to their patients and decide how to act accordingly.
	If enacted, the Bill would bind the NHS yet add nothing practical to our current powers. It would impose the views of one group upon another without, as now, giving us the freedom of a flexible response. While I understand the motivation behind the noble Lord's Bill, and I acknowledge that piped music can be extremely annoying, this regulation would be a disproportionate response. It is perhaps a sledgehammer to crack a nut.

Lord Beaumont of Whitley: My Lords, I thank the noble Lords who have taken part in this debate. The standard has been raised by the literary contribution of the noble Earl, Lord Howe.
	I also thank the noble Lord, Lord Addington, for his measured reply. He and the noble Earl said that it was a question for local decision and common sense—indeed, everyone said that. I quite agree that where that is in place, it is the way to approach the matter. But despite the survey which the Minister told us about, it remains true that in large numbers of hospitals—by "hospitals" I mean all hospitals—there is an immense amount of noise and distraction, not necessarily good distraction, from piped music and uncontrolled television broadcasts.
	It is right that we should tackle what has in this debate been under-rated as an evil, because it is an evil. When I was about to come into the Chamber, I met a noble Lord in the Corridor who said, "I wish you well with your Bill. It is much needed". Almost everyone who has spoken to me on this matter has said that the Bill is much needed. I therefore hope to take it through your Lordships' House.
	On Question, Bill read a second time, and committed to a Committee of the Whole House,